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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
Copyright (C) 2009 PR Newswire. All rights reserved
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