November 4, 2009

Susser Holdings Reports Third Quarter 2009 Results

- Same-store merchandise sales up 4.0%
- Merchandise margin of 33.0%
- Adjusted EBITDA(1) of $33.1 million, up 4.1%

CORPUS CHRISTI, Texas, Nov 04, 2009 /PRNewswire-FirstCall via COMTEX News Network/ -- Susser Holdings Corporation (Nasdaq: SUSS) today reported that same-store merchandise sales for the third quarter ended September 27, 2009, increased by 4.0 percent. Convenience store merchandise sales from all stores totaled $201.2 million in the latest quarter, up 6.3 percent from the third quarter of 2008. Retail merchandise margin was 33.0 percent, versus 34.9 percent a year ago.

Third quarter Adjusted EBITDA totaled $33.1 million, compared with $31.8 million a year ago. Companywide gross profit totaled $119.8 million, an increase of 0.5 percent from last year's third quarter. Total revenues were $882.1 million, compared with $1.2 billion in the third quarter of 2008, which largely reflects the significant decline in average retail and wholesale fuel prices versus a year ago that reduced fuel revenues by a combined $400.8 million. Lower fuel price-related revenues were partly offset by the higher merchandise sales, along with increased fuel volumes sold in both the retail and wholesale fuel segments versus a year ago.

Net income was $6.5 million, or $0.38 per diluted share, versus income of $6.9 million, or $0.40 per diluted share, for the third quarter of last year.

"We continued to see solid growth in same-store sales during the third quarter - although the rate of growth declined throughout the quarter," said Sam L. Susser, President and Chief Executive Officer. "At the same time we experienced pressure on margins in some of our product categories such as packaged drinks, cigarettes and food service, as our customers looked to us for greater value and competitors increased discounting to attract sales. Fortunately, we have been able to offset some of that pressure through aggressive pricing promotions partially funded by our supplier partners and associated market basket sales.

"While we expect some additional margin compression and challenging sales comparisons in the short term, we remain very focused on cost control, effective merchandising, providing great value for our customers and growing our market share, which will position us well for the recovery," Susser said.

New Convenience Store/Wholesale Dealer Site Update

The Company added 12 new retail units during the third quarter, bringing the total number of stores in operation to 527. Seven of the new retail stores were part of the 25-store package acquired from Jack in the Box, Inc. Four additional newly constructed stores opened during the quarter, and one location was purchased and remodeled. The Company currently has two stores under construction and expects to begin construction of two to three more large-format stores before the end of the year.

In its wholesale operations, Susser added 17 new dealer sites and discontinued eight, for a total of 381 dealer sites in operation at the end of the quarter. A net of seven new wholesale dealer sites were added in connection with the Jack in the Box transaction, as Susser previously supplied fuel to 11 of the 25 sites acquired.

Financing Update

During the latest quarter the Company entered into sale-leaseback transactions totaling $5.2 million for two newly constructed stores located in South and Central Texas. Also, the Company completed an additional sale/leaseback transaction in October for $2.7 million.

Third Quarter Financial and Operating Highlights

Convenience store same-store merchandise sales increased 4.0 percent compared with the third quarter of 2008. Total Company merchandise sales were $201.2 million, an increase of 6.3 percent from a year ago. Retail merchandise sales growth was driven in part by an increase in the federal excise tax on cigarettes that went into effect April 1, 2009, as well as by strong sales of packaged drinks and beer. Merchandise gross profit, net of shortages, totaled $66.3 million, up 0.5 percent from the third quarter of 2008. Net merchandise margin was 33.0 percent, compared with 34.9 percent a year ago. The decline in margin is due in part to the increase in the selling price of cigarettes as well as to increased sales of lower-margin value items.

Retail store fuel volumes increased 7.3 percent from a year ago to 175.3 million gallons for the third quarter. Average gallons sold per store increased 5.5 percent from a year ago to 343,800. Retail fuel revenues totaled $427.6 million, down 31.0 percent, as a result of a 35.7 percent drop in the average retail price of fuel. Retail fuel gross margins in the third quarter were 19.7 cents per gallon, or 15.8 cents after deducting credit card expense, compared with 22.3 cents per gallon a year ago, or 17.1 cents after credit card expense. Retail fuel gross profit was $34.6 million, compared with $36.4 million in the third quarter of 2008.

Wholesale fuel volumes sold to Susser's 381 dealers and other third-party customers increased 2.4 percent from a year ago to 125.2 million gallons. Wholesale fuel revenues declined 39.3 percent to $240.9 million as a result of a 40.7 percent drop in wholesale fuel prices year-over-year. Wholesale gross margin was 5.1 cents per gallon, compared with 7.3 cents per gallon a year ago. This reduced wholesale fuel gross profit by $2.5 million from a year ago to $6.4 million, down 28.1 percent.

Year to Date Results

For the first nine months of 2009, Susser reported merchandise sales of $583.0 million, up 6.8 percent from the comparable nine-month period last year. Total revenues were $2.4 billion, down 30.7 percent due to the lower fuel prices year-over-year. Gross profit was $324.7 million, up 0.3 percent from the first nine months of last year, reflecting higher fuel gallons sold and higher merchandise sales, partly offset by lower fuel margins in both the retail and wholesale segments. Adjusted EBITDA was $77.3 million, down 3.5 percent. Net income totaled $7.7 million, or $0.45 per diluted share, compared with $10.2 million, or $0.60 per diluted share for the same period last year.

2009 Guidance

The Company has revised its annual guidance for 2009 as follows:


                                                                    2008
                     New 2009      Prior 2009       YTD 2009      Full Year
                     Guidance       Guidance         Results       Results
                     --------      ----------       --------      ---------

    Merchandise
     Same-Store
     Sales Growth(a) 3.0%-4.5%       3.0%-5.5%         4.8%           6.6%
    Merchandise
     Margin, Net
     of Shortages   32.5%-33.5%     33.5%-35.0%       33.5%          34.3%
    Retail Average
     Per-Store
     Gallons
     Growth(a)       2.0%-4.0%       2.0%-5.0%         5.5%           2.6%
    Retail Fuel
     Margins
     (cents/gallon)  13.0-16.0       12.5-16.5        15.5(b)        17.8(b)
    Wholesale Fuel
     Margins          4.0-5.0         4.0-5.5          4.2            6.4
     (cents/gallon)
    New Retail
     Stores (c)        12-15           12-16            15             12
    New Wholesale
     Dealer
     Sites (c)         30-37           25-35            25             27
    Gross Capital
     Spending      $65-$80 million $65-$80 million $52.4 million $69.4 million
    Net Capital
     Spending (d)  $50-$65 million $50-$70 million $42.8 million $33.0 million

    (a) 2009 full-year guidance excludes the impact of a 53rd week occurring
        in the fourth quarter of 2009.
    (b) We report retail fuel margins before deducting credit card costs,
        which were approximately 3.4 cents per gallon in the first nine months
        of 2009 and 4.2 cents per gallon for the full 2008 fiscal year.
    (c) Numbers for both years do not reflect existing retail or wholesale
        store closures, which are typically lower volume locations than new
        sites.
    (d) Net capital spending is gross capital expenditures including
        acquisitions, less proceeds from sale/leaseback transactions and asset
        dispositions.

    (1) Adjusted EBITDA is a non-GAAP financial measure of performance and
        liquidity that has limitations and should not be considered as a
        substitute for net income or cash provided by (used in) operating
        activities. Please refer to the discussion and tables under
        "Reconciliations of Non-GAAP Measures" later in this news release for
        a discussion of our use of adjusted EBITDA and a reconciliation to net
        income and cash provided by operating activities for the periods
        presented.

Third Quarter Earnings Conference Call

Susser's management team will hold a conference call today at 11 a.m. ET (10 a.m. CT) to discuss third quarter results. To participate in the call, dial 480-629-9821 at least 10 minutes early and ask for the Susser conference call. The call will also be accessible via Susser's Web site at www.susser.com. To listen live, please visit the Investor Relations page of Susser's Web site at least 10 minutes early to register. A telephonic replay will be available through Nov. 11 by calling 303-590-3030 and using the pass code 4171075#. An archive will be available for 60 days on Susser's web site.

Corpus Christi, Texas-based Susser Holdings Corporation is a third-generation family led business that operates more than 525 convenience stores in Texas, New Mexico and Oklahoma under the Stripes and Town & Country banners. Restaurant service is available in more than 300 of its stores, primarily under the proprietary Laredo Taco Company and Country Cookin' brands. The Company also supplies branded motor fuel to more than 380 independent dealers through its wholesale fuel division.

Forward-Looking Statements

This news release contains "forward-looking statements" describing Susser's objectives, targets, plans, strategies, costs, anticipated capital expenditures, expansion of our food service offerings, potential acquisitions and new store openings and dealer locations. These statements are based on current plans and expectations and involve a number of risks and uncertainties that could cause actual results and events to vary materially, including but not limited to: competition from other convenience stores, gasoline stations, dollar stores, drug stores, supermarkets, hypermarkets and other wholesale fuel distributors; changes in economic conditions; volatility in energy prices; political conditions in key crude oil producing regions; wholesale cost increases of tobacco products; adverse publicity concerning food quality, food safety or other health concerns related to our restaurant facilities; consumer or other litigation; consumer behavior, travel and tourism trends; devaluation of the Mexican peso or restrictions on access of Mexican citizens to the U.S.; unfavorable weather conditions; changes in state and federal regulations; dependence on one principal supplier for merchandise, two principal suppliers for gasoline and one principal provider for transportation of substantially all of our motor fuel; financial leverage and debt covenants; changes in debt ratings; inability to identify, acquire and integrate new stores; dependence on senior management; acts of war and terrorism; and other unforeseen factors. For a full discussion of these and other risks and uncertainties, refer to the "Risk Factors" section of the Company's annual report on Form 10-K for the year ended December 28, 2008, and subsequent quarterly reports on Form 10-Q. These forward-looking statements are based on and include our estimates as of the date hereof. Subsequent events and market developments could cause our estimates to change. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if new information becomes available, except as may be required by applicable law.


                              Financial statements follow



                              Susser Holdings Corporation
                        Consolidated Statements of Operations
                                       Unaudited

                           Three Months Ended           Nine Months Ended
                       --------------------------- ---------------------------
                       September 28, September 27, September 28, September 27,
                           2008         2009           2008        2009
                       ------------- ------------- ------------- -------------
                            (dollars in thousands, except per share amounts)

    Revenues:
      Merchandise sales      $189,272     $201,190       $545,913    $583,049
      Motor fuel sales      1,016,644      668,477      2,872,252   1,771,805
      Other income              8,253       12,433         27,170      31,130
                                -----       ------         ------      ------
    Total revenues          1,214,169      882,100      3,445,335   2,385,984
    Cost of sales:
      Merchandise             123,306      134,883        358,863     387,830
      Motor fuel              971,354      627,476      2,761,531   1,673,331
      Other                       332          (20)         1,311          75
                                  ---          ---          -----          --
      Total cost of sales   1,094,992      762,339      3,121,705   2,061,236
                            ---------      -------      ---------   ---------
    Gross profit              119,177      119,761        323,630     324,748

    Operating expenses:
      Personnel                34,536       38,008         99,348     110,260
      General and
       administrative           9,468        8,814         26,580      25,905
      Other operating          35,676       31,610         94,624      86,610
      Rent                      8,728        9,135         25,814      27,178
      Loss (gain) on
       disposal of
       assets                    (196)         884            (45)      1,042
      Depreciation,
       amortization,            9,828       11,484         30,909      31,996
       and accretion            -----       ------         ------      ------
      Total operating
       expenses                98,040       99,935        277,230     282,991
                               ------       ------        -------     -------
    Income from
     operations                21,137       19,826         46,400      41,757
    Other income
     (expense):
      Interest expense,
       net                     (9,955)      (9,444)       (29,307)    (28,533)
      Other miscellaneous          25          (46)           239         (28)
                                   --          ---            ---         ---
      Total other
       expense, net            (9,930)      (9,490)       (29,068)    (28,561)
                               ------       ------        -------     -------
    Income before income
     taxes                     11,207       10,336         17,332      13,196
    Income tax expense         (4,331)      (3,823)        (7,131)     (5,430)
                               ------       ------         ------      ------
    Net income                  6,876        6,513         10,201       7,766
                                -----        -----         ------       -----
    Less: Net income
     attributable                  14           10             37          29
     to noncontrolling
      interests                    --           --             --          --
    Net income attributable    $6,862       $6,503        $10,164      $7,737
     to Susser Holdings        ======       ======        =======      ======
     Corporation
    Net income per
     share attributable
     to Susser Holdings
     Corporation:
      Basic                     $0.41        $0.38          $0.60       $0.46
      Diluted                   $0.40        $0.38          $0.60       $0.45
    Weighted average
     shares outstanding:
      Basic                16,880,404   16,937,013     16,880,404  16,930,903
      Diluted              16,987,817   17,030,021     16,977,561  17,005,231



                                     Susser Holdings Corporation
                                     Consolidated Balance Sheets

                                               December 28,     September 27,
                                                  2008              2009
                                               ------------     -------------
                                                                  unaudited
                                                      (in thousands)
    Assets
    Current assets:
      Cash and cash equivalents                    $8,284            $10,459
      Accounts receivable, net of allowance
       for doubtful accounts of $1,070 at
       December 28, 2008 and $917 at September
       27, 2009                                    51,549             52,744
      Inventories, net                             62,878             73,248
      Other current assets                          4,703              4,382
                                                    -----              -----
    Total current assets                          127,414            140,833
    Property and equipment, net                   408,733            415,564
    Other assets:
      Goodwill                                    237,953            242,451
      Intangible assets, net                       34,609             34,012
      Other noncurrent assets                      15,647             15,447
                                                   ------             ------
    Total other assets                            288,209            291,910
                                                  -------            -------
    Total assets                                 $824,356           $848,307
                                                 ========           ========
    Liabilities and shareholders' equity
    Current liabilities:
      Accounts payable                            $90,911           $104,338
      Accrued expenses and other current
       liabilities                                 34,738             39,846
      Current maturities of long-term debt          9,233             11,858
      Deferred purchase price - TCFS
       acquisition                                 10,000             10,000
                                                   ------             ------
    Total current liabilities                     144,882            166,042
    Long-term debt                                395,736            387,359
    Revolving line of credit                        3,630              3,930
    Deferred gain, long-term portion               33,720             32,569
    Deferred tax liability, long-term
     portion                                       28,323             27,355
    Other noncurrent liabilities                   13,087             15,964
                                                   ------             ------
    Total long-term liabilities                   474,496            467,177
    Commitments and contingencies:
    Shareholders' equity:
      Susser Holdings Corporation
       shareholders' equity:
        Common stock, $.01 par value;
         125,000,000 shares authorized;
         17,048,972 issued and 17,037,648
         outstanding as of December 28, 2008;
         17,153,267 issued and 17,141,943
         outstanding as of September 27, 2009         170                170
        Additional paid-in capital                180,189            182,899
        Retained earnings                          23,888             31,625
        Accumulated other comprehensive loss            -               (367)
                                                      ---               ----
        Total Susser Holdings Corporation
         shareholders' equity                     204,247            214,327
        Noncontrolling interest                       731                761
                                                      ---                ---
    Total shareholders' equity                    204,978            215,088
                                                  -------            -------
    Total liabilities and shareholders'
     equity                                      $824,356           $848,307
                                                 ========           ========

Reconciliations of Non-GAAP Measures to GAAP Measures

We define EBITDA as net income before net interest expense, income taxes and depreciation, amortization and accretion. Adjusted EBITDA further adjusts EBITDA by excluding non-cash stock-based compensation expense and certain other operating expenses that are reflected in our net income that we do not believe are indicative of our ongoing core operations, such as significant non-recurring transaction expenses and the gain or loss on disposal of assets and impairment charges. Adjusted EBITDAR adds back rent to adjusted EBITDA. In addition, those expenses that we have excluded from our presentation of adjusted EBITDA and adjusted EBITDAR are also excluded in measuring our covenants under our revolving credit facility and the indenture governing our senior notes.

We believe that adjusted EBITDA and adjusted EBITDAR are useful to investors in evaluating our operating performance because:

    --  they are used as a performance and liquidity measure under our
        subsidiaries' revolving credit facility and the indenture governing our
        senior notes, including for purposes of determining whether they have
        satisfied certain financial performance maintenance covenants and our
        ability to borrow additional indebtedness and pay dividends to us;

    --  securities analysts and other interested parties use them as a measure
        of financial performance and debt service capabilities;

    --  they facilitate management's ability to measure operating performance of
        our business because they assist us in comparing our operating
        performance on a consistent basis since they remove the impact of items
        not directly resulting from our retail convenience stores and wholesale
        motor fuel distribution operations;

    --  they are used by our management for internal planning purposes,
        including aspects of our consolidated operating budget, capital
        expenditures, as well as for segment and individual site operating
        targets; and

    --  they are used by our board of directors and management for determining
        certain management compensation targets and thresholds.

EBITDA, adjusted EBITDA and adjusted EBITDAR are not recognized terms under GAAP and do not purport to be an alternative to net income as a measure of operating performance or to cash flows from operating activities as a measure of liquidity. EBITDA, adjusted EBITDA and adjusted EBITDAR have limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations include:

    --  they do not reflect our cash expenditures, or future requirements, for
        capital expenditures or contractual commitments;

    --  they do not reflect changes in, or cash requirements for, working
        capital;

    --  they do not reflect significant interest expense, or the cash
        requirements necessary to service interest or principal payments on our
        revolving credit facility or senior notes;

    --  they do not reflect payments made or future requirements for income
        taxes;

    --  although depreciation and amortization are non-cash charges, the assets
        being depreciated and amortized will often have to be replaced in the
        future, and EBITDA, adjusted EBITDA and adjusted EBITDAR do not reflect
        cash requirements for such replacements; and

    --  because not all companies use identical calculations, our presentation
        of EBITDA, adjusted EBITDA  and adjusted EBITDAR may not be comparable
        to similarly titled measures of other companies.

The following table presents a reconciliation of net income to EBITDA, Adjusted EBITDA and Adjusted EBITDAR:


                           Three Months Ended           Nine Months Ended
                       --------------------------- ---------------------------
                       September 28, September 27, September 28, September 27,
                           2008          2009          2008           2009
                       ------------- ------------- ------------- -------------
                                            (in thousands)
    Net income
     attributable to
     Susser Holdings
     Corporation          $6,862        $6,503        $10,164         $7,737
    Depreciation,
     amortization,
     and accretion         9,828        11,484         30,909         31,996
    Interest expense, net  9,955         9,444         29,307         28,533
    Income tax expense     4,331         3,823          7,131          5,430
                           -----         -----          -----          -----
    EBITDA                30,976        31,254         77,511         73,696
    Non-cash stock based
     compensation          1,058           923          2,888          2,509
    Loss (gain) on
     disposal of assets     (196)          884            (45)         1,042
    Other miscellaneous      (25)           46           (239)            28
                             ---            --           ----             --
    Adjusted EBITDA      $31,813       $33,107        $80,115        $77,275
    Rent                   8,728         9,135         25,814         27,178
                           -----         -----         ------         ------
    Adjusted EBITDAR     $40,541       $42,242       $105,929       $104,453
                         =======       =======       ========       ========

The following table presents a reconciliation of net cash provided by operating activities to EBITDA, Adjusted EBITDA and Adjusted EBITDAR:


                                                       Nine Months Ended
                                                ------------------------------
                                                September 28,    September 27,
                                                     2008            2009
                                                -------------    -------------
                                                         (in thousands)
    Net cash provided by operating
     activities                                    $6,542          $50,086
      Changes in operating assets &
       liabilities                                 36,883           (7,221)
      Gain (loss) on disposal of assets                45           (1,042)
      Non-cash stock based compensation
       expense                                     (2,888)          (2,509)
      Noncontrolling interest                         (37)             (29)
      Deferred income tax                             153               (9)
      Amortization of debt premium                    375              457
      Income taxes                                  7,131            5,430
      Interest expense, net                        29,307           28,533
                                                   ------           ------
    EBITDA                                        $77,511          $73,696
      Non-cash stock based compensation             2,888            2,509
      Loss (gain) on disposal of assets               (45)           1,042
      Other miscellaneous                            (239)              28
                                                     ----               --
    Adjusted EBITDA                               $80,115          $77,275
      Rent                                         25,814           27,178
                                                   ------           ------
    Adjusted EBITDAR                             $105,929         $104,453
                                                 ========         ========

SUSS-IR


    Contacts:  Susser Holdings Corporation
               Mary Sullivan, Chief Financial Officer
               (361) 693-3743, msullivan@susser.com

               DRG&E
               Ken Dennard, Managing Partner
               (713) 529-6600, ksdennard@drg-e.com
               Anne Pearson, Senior Vice President
               (210) 408-6321, apearson@drg-e.com

SOURCE Susser Holdings Corporation

http://www.susser.com

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