Susser Holdings Reports Fourth Quarter and Full Year 2009 Results
CORPUS CHRISTI, Texas, Feb. 26 /PRNewswire-FirstCall/ -- Susser Holdings Corporation (Nasdaq: SUSS) today reported that merchandise sales from all stores increased 9.5 percent to $201.4 million in the fourth quarter of 2009. Same-store merchandise sales for the quarter declined by 1.2 percent versus a 6.5 percent increase a year ago. Retail merchandise margin was 32.7 percent, versus 34.6 percent for the same period in 2008.
Adjusted EBITDA(1) for the three months ended January 3 totaled $15.0 million, compared with $30.5 million a year ago. Companywide gross profit declined 9.8 percent year-over-year to $102.6 million. Total revenues for the quarter were $921.2 million, up 15.8 percent from a year ago. These results reflect an additional week versus the prior year, increased fuel prices and gallons sold, and higher merchandise sales driven in part by a cigarette tax increase that went into effect in April 2009, a full year’s operation of the 12 new retail stores added in 2008 and the 15 retail stores added during 2009. The Company had a net loss of $5.7 million, or $0.33 per diluted share, versus net income of $6.3 million, or $0.37 per diluted share, for the fourth quarter of last year.
“We finally began to feel the full impact of the nationwide economic downturn across all of our markets during the fourth quarter,” said Sam L. Susser, President and Chief Executive Officer. “The Company’s business is historically seasonal, producing the bulk of its operating cash flow in the second and third quarters.
“However, the economic slowdown, combined with unfavorable weather comparisons, negatively impacted our year-over-year sales volumes. Cigarette inflation, more aggressive pricing from other retailers and restaurants, as well as our customers trading down to lower-priced options, put additional pressure on margins during the last part of the year. Rising fuel costs also compressed our fuel margins during the fourth quarter as compared to 2008, although full year 2009 retail margins tracked very closely with our five-year average.
“We are seeing signs, however, that the worst may be behind us. In each month from July to December, we experienced sequentially lower comparable merchandise sales, but we have seen stabilization over the past six weeks.
“As we approach the half-way point in our ongoing Town & Country store rebranding program to the Stripes brand, we are very pleased with performance of these rebranded stores, but more importantly, we expect significant longer-term synergies from operating under a single Stripes brand.
“We continue to strengthen and improve our liquidity, but until we see signs of a sustained economic recovery, we will be cautious in our capital spending. We are also reducing our cost structure across our operations to enhance profitability,” Susser said.
New Convenience Store/Wholesale Dealer Site Update
The Company added 15 retail stores during 2009 and closed two underperforming, older stores at the end of the fourth quarter, bringing the total number of stores in operation at year-end to 525. The Company recently opened one additional store in South Texas and currently has four more stores under construction, one of which is expected to open by the end of the first quarter.
In its wholesale operations, Susser added nine new dealer sites during the quarter and 34 for the full year, for a total of 390 in operation at the end of the year.
Financing Update
During the fourth quarter, the Company generated $16.8 million in proceeds from sale-leaseback transactions for seven recently constructed stores. For the full year, Susser completed sale-leaseback transactions totaling $24.8 million. The Company has already started its 2010 new store financing program by funding $5.8 million of sale-leaseback transactions and a favorable $10 million long-term mortgage loan transaction.
Fourth Quarter Financial and Operating Highlights
Total Company merchandise sales were $201.4 million, an increase of 9.5 percent from a year ago. Same-store merchandise sales declined by 1.2 percent compared with an increase of 6.5 percent in the fourth quarter of 2008. Merchandise gross profit, net of shortages, totaled $65.9 million, up 3.6 percent from the fourth quarter of 2008. Net merchandise margin was 32.7 percent, compared with 34.6 percent a year ago. The decline in merchandise margin is due in part to the effect of the first quarter 2009 cigarette price increase as well as to increased sales of lower-margin items.
Retail store fuel volumes increased 4.2 percent from a year ago to 187.0 million gallons for the fourth quarter. Average gallons sold per store declined 5.9 percent from a year ago to 337,000, as compared to a 6.2 percent increase in the fourth quarter of 2008. Retail fuel revenues totaled $463.3 million, up 17.8 percent, primarily as a result of a 29-cent-per-gallon increase in motor fuel prices at the pump. Retail fuel gross margins in the fourth quarter were 11.9 cents per gallon, or 8.2 cents after deducting credit card expense, compared with 17.7 cents per gallon a year ago, or 14.2 cents after credit card expense. Retail fuel gross profit was $22.2 million, down 30 percent from the fourth quarter of 2008.
Wholesale fuel volumes sold to Susser’s 390 dealers and other third-party customers during the fourth quarter declined 3.5 percent from a year ago to 121.3 million gallons. Wholesale fuel revenues increased by 18.0 percent to $246.4 million as a result of higher fuel prices. Wholesale gross margin was 3.7 cents per gallon, compared with 7.2 cents per gallon a year ago. This reduced wholesale fuel gross profit by 49.8 percent to $4.5 million.
Full Year Results
For the full year ended January 3, 2010, which includes 53 weeks, Susser reported merchandise sales of $784.4 million, up 7.5 percent from the comparable 52-week period last year. Total revenues were $3.3 billion, down 22.0 percent due to lower retail fuel prices during the first nine months of 2009. Excluding the impact of the 53rd week, same-store merchandise sales were up 3.3 percent for the full year. Gross profit was $427.4 million, down 2.3 percent from 2008, reflecting a $34.3 million reduction from the impact of lower fuel margins for the full year in both the retail and wholesale segments, partly offset by higher merchandise profits. Adjusted EBITDA(1) was $92.2 million, down 16.6 percent. Net income totaled $2.1 million, or $0.12 per diluted share, compared with $16.5 million, or $0.97 per diluted share for the same period last year.
2010 Guidance
The Company has provided initial guidance for 2010 as follows:
FY 2010 Guidance FY 2009 Results
---------------- ---------------
Merchandise Same-Store Sales Growth (a) 0.0%-4.0% 3.3%
--------------------------------------- --------- ----
Merchandise Margin, Net of Shortages 32.0%-33.5% 33.3%
------------------------------------ ----------- -----
Retail Avg. Per-Store Gallons Growth (a) (3.0%)-3.0% 2.4%
---------------------------------------- ----------- ----
Retail Fuel Margins (cents/gallon) (b) 12.5-15.5 14.6
-------------------------------------- --------- ----
Wholesale Fuel Margins (cents/gallon) 3.5-5.5 4.1
------------------------------------- ------- ---
New Retail Stores (c) 6-16 15
--------------------- ---- ---
New Wholesale Dealer Sites (c) 15-30 34
------------------------------ ----- ---
Gross Capital Spending ($ million) $40-$65 $74.8
---------------------------------- ------- -----
Net Capital Spending (d) ($ million) $25-$50 $48.2
----------------------------------- ------- -----
(a) 2009 results exclude 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 3.5 cents per gallon for the full 2009 fiscal
year. For 2009, the average retail selling price of fuel was $2.23
per gallon.
(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.
Fourth 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 fourth quarter results. To participate in the call, dial 480-629-9772 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 March 5 by calling 303-590-3030 and using the pass code 4227102#. 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 primarily 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 approximately 390 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 January 3, 2010, which will be filed on or before March 19, 2010. 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
Three Months Ended
(unaudited) Twelve Months Ended
December January December January
28, 3, 28, 3,
2008 2010 2008 2010
---- ---- ---- ----
Revenues: (in thousands)
Merchandise sales $183,944 $201,375 $729,857 $784,424
Motor fuel sales 601,970 709,654 3,474,222 2,481,459
Other 9,394 10,205 36,566 41,425
----- ------ ------ ------
Total revenues 795,308 921,234 4,240,645 3,307,308
Cost of Sales:
Merchandise 120,352 135,510 479,215 523,340
Motor fuel 561,201 682,900 3,322,732 2,356,231
Other (23) 283 1,288 358
--- --- ----- ---
Total Cost of Sales 681,530 818,693 3,803,235 2,879,929
------- ------- --------- ---------
Gross Profit 113,778 102,541 437,410 427,379
Operating Expenses:
Personnel 33,732 39,619 133,080 149,879
General & Administrative 10,352 8,467 36,932 34,372
Other operating 31,402 30,675 126,028 117,375
Rent 8,806 9,721 34,620 36,899
Loss on disposal of
assets and impairment
charge 54 1,360 9 2,402
Depreciation,
amortization and
accretion 9,933 12,386 40,842 44,382
----- ------ ------ ------
Total operating expenses 94,279 102,228 371,511 385,309
------ ------- ------- -------
Income from operations 19,499 313 65,899 42,070
Other income (expense):
Interest expense, net (9,949) (9,570) (39,256) (38,103)
Other miscellaneous 39 (27) 278 (55)
-- ---- --- ----
Total other expense, net (9,910) (9,597) (38,978) (38,158)
------- ------- -------- --------
Income before income
taxes 9,589 (9,284) 26,921 3,912
Income tax (expense)
benefit (3,265) 3,625 (10,396) (1,805)
------- ----- -------- -------
Net income 6,324 (5,659) 16,525 2,107
----- ------- ------ -----
Less: Net income
attributable to
noncontrolling
interests 11 10 48 39
-- -- -- --
Net income (loss)
attributable to Susser
Holdings Corporation $6,313 $(5,669) $16,477 $2,068
====== ======== ======= ======
Earnings (loss) per
common share:
Basic $0.37 $(0.33) $0.98 $0.12
Diluted $0.37 $(0.33) $0.97 $0.12
Weighted average shares
outstanding:
Basic 16,894,649 16,954,401 16,883,965 16,936,777
Diluted 16,968,822 16,954,401 16,976,320 17,022,004
SUSSER HOLDINGS CORPORATION
CONSOLIDATED BALANCE SHEETS
December 28, January 3,
2008 2010
----------- ----------
(in thousands)
Assets
Current assets:
Cash and cash equivalents $8,284 $17,976
Accounts receivable, net of allowance
for doubtful accounts $1,070 at
December 28, 2008 and $903 at
January 3, 2010 51,549 65,510
Inventories, net 62,878 78,788
Assets held for sale - 70
Other current assets 4,703 9,437
----- -----
Total current assets 127,414 171,781
Property and equipment, net 408,733 408,771
Other assets:
Goodwill 237,953 242,295
Intangible assets, net 34,609 33,144
Other noncurrent assets 15,647 17,027
------ ------
Total other assets 288,209 292,466
------- -------
Total assets $824,356 $873,018
======== ========
Liabilities and shareholders' equity
Current liabilities:
Accounts payable $90,911 $129,425
Accrued expenses and other current
liabilities 34,738 28,632
Current maturities of long-term debt 9,233 10,545
Deferred purchase price – TCFS
acquisition 10,000 5,180
------ -----
Total current liabilities 144,882 173,782
Long-term debt 395,736 384,574
Revolving line of credit 3,630 25,800
Deferred gain, long-term portion 33,720 33,786
Deferred tax liability, long-term
portion 28,323 28,846
Other noncurrent liabilities 13,087 15,812
------ ------
Total long-term liabilities 474,496 488,818
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;
17,158,717 issued and 17,141,393
outstanding as of January 3, 2010 170 170
Additional paid-in capital 180,189 183,880
Retained earnings 23,888 25,956
Accumulated other comprehensive loss - (358)
- -----
Total Susser Holdings Corporation
shareholders' equity 204,247 209,648
Noncontrolling interest 731 770
--- ---
Total shareholders' equity 204,978 210,418
------- -------
Total liabilities and shareholders'
equity $824,356 $873,018
======== ========
KEY OPERATING METRICS
Three Months Ended
(unaudited) Year Ended
------------ ----------
December January December January
28, 3, 28, 3,
2008 2010 2008 2010
--------- -------- --------- --------
(dollars and gallons in thousands, except per
gallon data)
Revenue:
Merchandise
sales $183,944 $201,375 $729,857 $784,424
Motor fuel –
retail 393,201 463,266 2,150,727 1,605,534
Motor fuel –
wholesale 208,769 246,388 1,323,495 875,925
Other income (1) 9,394 10,205 36,566 41,425
----- ------ ------ ------
Total revenue 795,308 921,234 4,240,645 3,307,308
Gross Profit:
Merchandise 63,592 65,865 250,642 261,084
Motor fuel –
retail 31,732 22,215 120,556 105,021
Motor fuel –
wholesale 9,037 4,539 30,934 20,207
Other (1) 9,417 9,922 35,278 41,067
----- ----- ------ ------
Total Gross
Profit 113,778 102,541 437,410 427,379
Adjusted
EBITDA (2)
Retail 24,615 13,033 91,734 78,017
Wholesale 7,318 2,772 24,849 19,128
Other (1,400) (832) (5,935) (4,897)
------- ----- ------- -------
Total
Adjusted
EBITDA 30,533 14,973 110,648 92,248
Retail
merchandise
margin 34.6% 32.7% 34.3% 33.3%
Merchandise
same store
sales growth 6.5% (1.2)% 6.6% 3.3%
Average per
retail
store:
Merchandise
sales $361 $356 $1,437 $1,488
Motor fuel
gallons 358 337 1,355 1,388
Motor fuel
gallons
sold:
Retail 179,483 187,033 677,308 719,649
Wholesale 125,759 121,315 486,516 494,822
Average
retail price
of motor
fuel $2.19 $2.48 $3.18 $2.23
Motor fuel
gross profit
cents per
gallon :
Retail 17.7 cents 11.9 cents 17.8 cents 14.6 cents
Wholesale 7.2 cents 3.7 cents 6.4 cents 4.1 cents
Retail credit
card fees
cents per
gallon 3.5 cents 3.7 cents 4.2 cents 3.5 cents
(1) 2008 results reflect reclassification of sale of rights to operate
dealer locations in the amount of $0.3 million and $0.8 million for
the three months and year ended December 28, 2008, respectively.
(2) See following Reconciliation of Non-GAAP Measures to GAAP Measures.
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 (along with certain other items) 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;
- 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 Year Ended
------------------ ----------
December January December January
28, 3, 28, 3,
2008 2010 2008 2010
---- ---- ---- ----
(in thousands)
Net income (loss) attributable
to Susser Holdings
Corporation $6,313 $(5,669) $16,477 $2,068
Depreciation, amortization and
accretion 9,933 12,386 40,842 44,382
Interest expense, net 9,949 9,570 39,256 38,103
Income tax expense (benefit) 3,265 (3,625) 10,396 1,805
----- ------- ------ -----
EBITDA 29,460 12,662 106,971 86,358
Non-cash stock-based
compensation 1,058 924 3,946 3,433
Loss on disposal of assets 54 1,360 9 2,402
Other miscellaneous (1) (39) 27 (278) 55
---- -- ----- --
Adjusted EBITDA 30,533 14,973 110,648 92,248
Rent expense 8,806 9,721 34,620 36,899
----- ----- ------ ------
Adjusted EBITDAR $39,339 $24,694 $145,268 $129,147
======= ======= ======== ========
(1) Other miscellaneous charges represent income from a non-consolidated
joint venture and other non-operating income.
The following table presents a reconciliation of net cash provided by operating activities to EBITDA, adjusted EBITDA and adjusted EBITDAR:
Year Ended
----------
December 28, January 3,
2008 2010
---- ----
(in thousands)
Net cash provided by operating activities $51,129 $49,806
Changes in operating assets & liabilities 9,779 3,494
Loss on disposal of assets (9) (2,402)
Stock based compensation expense (3,946) (3,433)
Noncontrolling interest (48) (39)
Deferred income tax (106) (1,593)
Amortization of debt premium 520 617
Income taxes 10,396 1,805
Interest expense, net 39,256 38,103
------ ------
EBITDA 106,971 86,358
Non-cash stock based compensation expense 3,946 3,433
Loss on disposal of assets 9 2,402
Other miscellaneous (1) (278) 55
----- --
Adjusted EBITDA 110,648 92,248
Rent expense 34,620 36,899
------ ------
Adjusted EBITDAR $145,268 $129,147
======== ========
(1) Other miscellaneous charges represent income from a non-consolidated
joint venture and other non-operating income.
Contacts: | Susser Holdings Corporation | |
Mary Sullivan, Chief Financial Officer | ||
(361) 693-3743, [email protected] | ||
DRG&E | ||
Ken Dennard, Managing Partner | ||
(713) 529-6600, [email protected] | ||
Anne Pearson, Senior Vice President | ||
(210) 408-6321, [email protected] | ||
SUSS-IR
SOURCE Susser Holdings Corporation
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