NYSE:CAPL CrossAmerica Partners Q3 2023 Earnings Report $23.06 +0.03 (+0.14%) Closing price 04/17/2025 03:59 PM EasternExtended Trading$23.03 -0.03 (-0.14%) As of 04/17/2025 05:20 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings History CrossAmerica Partners EPS ResultsActual EPS$0.31Consensus EPS $0.17Beat/MissBeat by +$0.14One Year Ago EPSN/ACrossAmerica Partners Revenue ResultsActual Revenue$1.21 billionExpected Revenue$1.32 billionBeat/MissMissed by -$110.60 millionYoY Revenue GrowthN/ACrossAmerica Partners Announcement DetailsQuarterQ3 2023Date11/7/2023TimeN/AConference Call DateWednesday, November 8, 2023Conference Call Time9:00AM ETUpcoming EarningsCrossAmerica Partners' Q1 2025 earnings is scheduled for Tuesday, May 6, 2025, with a conference call scheduled on Thursday, May 8, 2025 at 9:00 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by CrossAmerica Partners Q3 2023 Earnings Call TranscriptProvided by QuartrNovember 8, 2023 ShareLink copied to clipboard.There are 3 speakers on the call. Operator00:00:00Welcome to the CrossAmerica Partners Third Quarter 2023 Earnings Call. At this time, all lines are in a listen only mode. Following the presentation, we will conduct a question and answer session. I would now like to turn the conference over to Mauro Topper, Chief Financial Officer. Ms. Operator00:00:22Topper, please go ahead. Speaker 100:00:27Thank you, operator. Good morning, and thank you for joining the CrossAmerica Partners Third Quarter 2023 Earnings Call. With me today is Charles Nifong, CEO and President. We'll start off the call today with Charles providing some opening comments and a brief overview of CrossAmerica's operational performance from the quarter, and then I will discuss the financial results. We will then open up the call to questions. Speaker 100:00:53Today's call will follow presentation slides that are available as part of the webcast and are posted on the CrossAmerica website. Before we begin, I would like to remind everyone that today's call, including the question and answer session, may These lines include forward looking statements regarding expected revenue, future plans, future operational metrics and opportunities and expectations of the organization. There can be no assurance that management's expectations, beliefs and projections Will be achieved or that actual results will not differ from expectations. Please see CrossAmerica's filings With the Securities and Exchange Commission, including annual reports on Form 10 ks and quarterly reports on Form 10 Q, for a discussion of important factors that could affect our actual results. Forward looking statements represent the judgment of CrossAmerica's management as of today's date, and the organization disclaims any intent or obligation to update any forward looking statements. Speaker 100:02:01During today's call, we may also provide certain performance measures that do not conform to U. S. Generally Accepted Accounting Principles or GAAP. We have provided schedules that reconcile these non GAAP measures with our reported results on a GAAP basis as part of our earnings press release. Today's call is being webcast and a recording of this conference call will be available on the CrossAmerica website for a period of 60 days. Speaker 100:02:31With that, I will now turn the call over to Charles. Speaker 200:02:37Thank you, Maura. As always, Maura and I appreciate everyone joining us, And thank you for making the time to listen to the call this morning. During today's call, I will briefly go through the operating highlights for the Q3. I will also provide color on the market and a few other updates similar to what I provided on previous calls. Mark will then review in more detail the financial results. Speaker 200:03:01Now if you turn to slide 4, I will briefly review some of our operating results. For the Q3 of 2023, Our wholesale fuel gross profit declined 4 percent to $18,800,000 compared to $19,500,000 in the Q3 of 2022. The decline was driven by a decrease in fuel margin, partially offset by an increase in fuel volume. Wholesale segment gross profit was $32,900,000 a decrease of 4% when compared to the $34,100,000 of wholesale gross profit in the Q3 of 2022. Our wholesale fuel margin declined 7% from $0.092 per gallon in the Q3 of 2022 to $0.086 per gallon in the Q3 of 2023. Speaker 200:03:51The decline was primarily driven by the following two factors. The first was an exceptionally strong fuel margin performance of our veritably priced wholesale business in the Q3 of 2022 relative to the current year. If you recall, We and the industry experienced an exceptionally strong fuel margin environment in the Q3 of 2022. While the Q3 of 2023 was a generally favorable environment for fuel margins, it was not nearly as favorable as the fuel margin environment in the prior year. The second factor was that crude oil prices were lower during the quarter compared to the prior year and the year over year decrease in fuel margin was primarily driven by the resultant lower cost of motor fuel during the quarter and the corresponding decrease in the dollar value of the terms discounts on certain gallons purchased during the quarter. Speaker 200:04:42This was partially offset by our improved fuel sourcing costs, which resulted from our continued ongoing efforts to lower our cost of products. Our wholesale volume was 217 3,000,000 gallons for the Q3 of 2023 compared to 212,700,000 gallons in the Q3 of 2022. The 2% increase in volume when compared to the same period in 2022 was largely due to the community service station assets acquired during the Q4 of 2022, partially offset by the conversion of certain lessee dealer locations to our retail class of trade and lower volume in our same store business. Since I just mentioned the community service station assets, we closed on that transaction approximately 1 year ago. These assets have been great additions to the portfolio and this past year performed better than our expectations for them at the time of acquisition. Speaker 200:05:40Returning to volume, for the quarter, our same store volume in the wholesale segment was down approximately 1.2% year over year. We saw declining same store volumes in the last few weeks of the quarter, which has continued in the period since the quarter's end, with same store wholesale volume down 2% to 3% year over year in this period. Regarding our wholesale rent, Our base rent for the quarter was $13,000,000 compared to the prior year of $13,800,000 a slight decrease due to the conversion of certain lessee dealer sites to company operated locations that occurred earlier this year. Aside from the decrease in rent due to the class of trade changes, Our rental income continues to be a durable income stream in our business. For the Retail segment, Despite the challenging year over year comparisons due to the exceptionally strong fuel margins of the Q3 of 2022, our Retail segment performed very well during the Q3 of 2023, generating $67,600,000 in gross profit, While our motor fuel gross profit declined 34%, our merchandise gross profit increased 23% for the quarter when compared to the same period in 2022. Speaker 200:06:54For volume, on a same store basis, our retail volume increased 2% for the quarter year over year. As in our wholesale segment, we saw year over year volume performance decline in the latter part of the quarter. In the period since the quarter end, same store volume has declined in the mid single digits, driven by some site specific issues in certain geographies and an unfavorable comparison to particularly strong prior year performance. On the fuel margin front, Our retail fuel margin on a $0.01 per gallon basis declined 30% year over year as we experienced exceptionally strong fuel margins at $0.534 per gallon in the Q3 of 2022. However, On an absolute basis, our quarterly retail fuel margin of $0.372 per gallon was strong and up from the 2nd quarter retail fuel margin. Speaker 200:07:47And while fuel volumes have been lower since the quarter end, as I noted a moment ago, fuel margins since the quarter end have generally been higher than what we experienced in the Q3. For inside sales, on a same site basis, our inside sales increased approximately 4% relative to last year. Inside sales, excluding cigarettes, were up approximately 9% year over year on a same store basis. The strong sales performance was generally across all categories, with packaged beverages and our food categories performing particularly well. On the store merchandise margin front, Our merchandise gross margin increased 23 percent to $25,400,000 driven by our increased sales from the higher store count, the increase in same store sales and improvement in our store merchandise gross margin percentage. Speaker 200:08:39Our store merchandise gross margin percentage was up 160 basis points year over year. The store merchandise margin improvement was due to merchandise sales shifts towards higher margin categories and certain initiatives we have in place in regards to pricing, product sourcing and promotions. In the period since quarter end, same store inside sales inclusive of cigarettes are up approximately 3% to 5% over the prior year. As we noted last quarter, in our Retail segment, if you look at our company operated site count, we are up approximately 40 retail sites from the prior year, but flat from the Q2 of this year. The increase in site count relative to the prior year is due to our conversion of certain controlled sites from other classes of trade to company operated sites earlier in the year. Speaker 200:09:28Although in the Q3, we did not have any significant conversion activity, We expect to continue to convert additional sites from other classes of trade to company operated retail sites or to a lesser extent Retail commission sites going forward. For the sites we do convert to company operated retail or commission locations, We believe that we can generate more profitability from these locations and enhance these sites' long term value through operating these sites ourselves. Overall, despite the challenging year over year comparison to last year's retail fuel margin, it was a positive quarter for our retail segment at same store volume, same store merchandise sales, same store merchandise gross margin and store merchandise margin percentage were all up relative to the prior year. On the divestiture front, we had a quiet quarter, selling only 1 property this quarter after selling 6 properties in the 2nd quarter. Year to date, we have sold 8 properties for approximately $8,300,000 in proceeds. Speaker 200:10:27We continuously look at our portfolio to identify potential divestiture locations and it remains a focus of ours to free up capital in this manner, which we will either put towards reducing leverage or investing in growth opportunities. Overall, the business continues to perform well across many different operating environments. The underlying fundamentals remain strong. Our balance sheet is healthy and positioned well for the current interest rate environment, and we continue to work hard on executing our initiatives and constantly improving the business. We cannot be successful without great people. Speaker 200:11:01So thank you to all the CrossAmerica team members who work hard every day to generate results and to drive the business forward. With that, I will turn it over to Mara for a more detailed financial review. Speaker 100:11:17Thank you, Charles. If you would please turn to slide 6, I would like to review our 3rd quarter results for the partnership. We reported net income of $12,300,000 for the Q3 of 2023 compared to net income of $27,600,000 in the Q3 of 2022. The decline in net income was primarily due to the very elevated fuel margins that we experienced in the Q3 of 2022, as Charles noted earlier. Adjusted EBITDA was $44,200,000 for the Q3 of 2023 compared to adjusted EBITDA of $62,600,000 for the Q3 of 2022. Speaker 100:12:00Our distributable cash flow for the Q3 of 2023 was $31,400,000 versus $50,900,000 for the Q3 of 2022. The decrease in distributable cash flow was primarily again due to the exceptionally strong results in the Q3 of 2022, in addition to an increase in cash interest expense that also impacted our 3rd quarter net income. Our distribution coverage for the current quarter was 1.57 times compared to 2.55 times for the Q3 of 2022. On a trailing 12 month basis, our distribution coverage was 1.43 times for the 12 months ended September 30, 2023 compared to 1.74 times for the comparable period ended September 30, 2022. These strong distribution coverage ratio statistics provide continuing evidence of the strength of our business as our team continues to execute on our organizational goals. Speaker 100:13:08The partnership paid a distribution of $0.525 per unit during the Q3 of 2023, attributable to the Q2 of 2023 for a total of almost $20,000,000 Charles discussed some of the primary drivers of our top line and gross profit performance for the quarter earlier. Turning to the expense portion of our operations. Operating expenses for the Q3 increased $3,800,000 compared to the 2022 Q3. As with last quarter, the increase was primarily driven by incremental operating expenses in our Retail segment due to the conversion of lessee dealer and commission locations to company operated locations earlier this year. The incremental operating expense for the number of locations we converted to company operated retail locations is in line with our expectations for these sites as they are converted to company operated locations. Speaker 100:14:09Adjusting for the known incremental operating expenses we add to the business when converting a store to the company operated cost of trade. The increase in our other operating expenses was below the inflation levels being experienced in the wider economy. This is a meaningfully moderated operating expense profile than we have seen for the past 18 months, though we continue to monitor the impacts of inflationary cost pressures on our business. The largest driver of operating expenses are our store labor costs, which are primarily the result of the number of labor hours our stores are staffed and wages. Year over year, Our same store labor hours are up approximately 2% as our team has continued their focus on ensuring our stores are open and appropriately staffed to meet customer needs. Speaker 100:15:07Although we have experienced year over year cost pressures In the area of maintenance and supplies spending, these have been offset by our team's continued focus on cost management in other areas of the business, which have benefited us in this recently completed quarter. Our G and A expenses increased 4% for the quarter year over year, So this was primarily driven by higher equity compensation expense with all other G and A expenses roughly flat year over year. Moving to the next slide, we spent a total of $10,400,000 on capital expenditures during the 3rd quarter, with $8,500,000 of that total being growth related capital expenditures. This was in line with our Q3 of $10,400,000 which included spending for our rebranding efforts related to the acquisition of assets from 711 in 2021. During this past quarter, growth related capital spending included image upgrades that are being funded primarily through incentives from our fuel suppliers. Speaker 100:16:19As of September 30, 2023, our total credit facility balance was $762,500,000 up slightly from our June 30, 2023 balance of $761,500,000 and below our end of 2022 balance of $765,100,000 During the Q3 of 2023, we experienced a generally rising fuel price environment, which resulted in a usage of working capital during the quarter. We also will continue to receive the fuel supplier incentive funds related to our image upgrade projects in future quarters as upgrades are completed. These two net uses of capital during the quarter are generally items we consider timing matters and drove the roughly flat quarter over quarter balance on our credit facility. Our credit facility defined leverage ratio was 4.35 times as of September 30, 2023. We continue to remain focused on our operational performance and associated cash flow generation to manage our leverage ratio at approximately 4 times on a credit facility defined basis. Speaker 100:17:41Additionally, although we have felt the impact of the elevated interest rate environment, as with prior periods, We continue to benefit from the interest rate swaps we put into place in early 2020 and recently in April 2023. Approximately 65% of our current credit facility balance is swapped to fixed rates. As of September 30, 2023, taking the interest rate swap contracts the partnership currently has in place into account, Our effective interest rate on the Cabell credit facility was 4.9%, which is an attractive rate against the current rate backdrop. In conclusion, as Charles noted, despite this quarter's year over year comparisons, We had a strong Q3 with positive performance in fuel and merchandise gross profit in our Retail segment. We ended the quarter with a strong balance sheet with a continued focus on maintaining a leverage profile that provides us with flexibility to opportunistically invest in our business. Speaker 100:18:52We appreciate the efforts of all of our team members around the country during this past busy summer season that is most of our Q3, and we look forward to continuing Our strong performance into the Q4 and 2024. With that, we will open it up for questions. Operator00:19:16Thank you. Ladies and gentlemen, we will now begin the question and answer Speaker 100:19:23mode. Operator00:19:29In the order they are received. One moment please for your first question. Speaker 200:19:57Well, it doesn't appear we have any questions today. Should you have any questions later, please feel free to reach out to us. As always, thank you for joining us and have a great day. Operator00:20:12Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Thank you.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallCrossAmerica Partners Q3 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Quarterly report(10-Q) CrossAmerica Partners Earnings HeadlinesCrossAmerica Partners to Announce First Quarter 2025 Earnings Results on May 7April 17 at 6:45 AM | globenewswire.comOwn The Gas Pump, And Collect 8% YieldsMarch 29, 2025 | seekingalpha.comThe U.S. just rewrote the rules of retirementFor decades, Wall Street told retirees to stick with big names, stay diversified, and live off dividends. But Tim Plaehn says those rules no longer apply — and the 2025 trade war is exposing just how fragile that plan really was. Tim just released a video briefing explaining how the global shift is hammering traditional income stocks — and how a few U.S.-focused companies are built to weather the chaos.April 18, 2025 | Investors Alley (Ad)9%-Yielding CrossAmerica Partners LP Hits Another Record HighMarch 18, 2025 | incomeinvestors.comCrossAmerica Partners LPMarch 15, 2025 | cnn.comCrossAmerica Partners Files 2024 Annual Report on Form 10-KFebruary 28, 2025 | globenewswire.comSee More CrossAmerica Partners Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like CrossAmerica Partners? Sign up for Earnings360's daily newsletter to receive timely earnings updates on CrossAmerica Partners and other key companies, straight to your email. Email Address About CrossAmerica PartnersCrossAmerica Partners (NYSE:CAPL) engages in the wholesale distribution of motor fuels, operation of convenience stores, and ownership and leasing of real estate used in the retail distribution of motor fuels in the United States. It operates in two segments, Wholesale and Retail. The Wholesale segment engages in the wholesale distribution of motor fuels to lessee dealers, independent dealers, commission agents, and company operated retail sites. The Retail segment is involved in the sale of convenience merchandise items; and retail sale of motor fuels at company operated retail sites and retail sites operated by commission agents. CrossAmerica GP LLC operates as the general partner of the company. The company was formerly known as Lehigh Gas Partners LP and changed its name to CrossAmerica Partners LP in October 2014. The company was founded in 1992 and is based in Allentown, Pennsylvania.View CrossAmerica Partners ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Archer Aviation Unveils NYC Network Ahead of Key Earnings Report3 Reasons to Like the Look of Amazon Ahead of EarningsTesla Stock Eyes Breakout With Earnings on DeckJohnson & Johnson Earnings Were More Good Than Bad—Time to Buy? 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There are 3 speakers on the call. Operator00:00:00Welcome to the CrossAmerica Partners Third Quarter 2023 Earnings Call. At this time, all lines are in a listen only mode. Following the presentation, we will conduct a question and answer session. I would now like to turn the conference over to Mauro Topper, Chief Financial Officer. Ms. Operator00:00:22Topper, please go ahead. Speaker 100:00:27Thank you, operator. Good morning, and thank you for joining the CrossAmerica Partners Third Quarter 2023 Earnings Call. With me today is Charles Nifong, CEO and President. We'll start off the call today with Charles providing some opening comments and a brief overview of CrossAmerica's operational performance from the quarter, and then I will discuss the financial results. We will then open up the call to questions. Speaker 100:00:53Today's call will follow presentation slides that are available as part of the webcast and are posted on the CrossAmerica website. Before we begin, I would like to remind everyone that today's call, including the question and answer session, may These lines include forward looking statements regarding expected revenue, future plans, future operational metrics and opportunities and expectations of the organization. There can be no assurance that management's expectations, beliefs and projections Will be achieved or that actual results will not differ from expectations. Please see CrossAmerica's filings With the Securities and Exchange Commission, including annual reports on Form 10 ks and quarterly reports on Form 10 Q, for a discussion of important factors that could affect our actual results. Forward looking statements represent the judgment of CrossAmerica's management as of today's date, and the organization disclaims any intent or obligation to update any forward looking statements. Speaker 100:02:01During today's call, we may also provide certain performance measures that do not conform to U. S. Generally Accepted Accounting Principles or GAAP. We have provided schedules that reconcile these non GAAP measures with our reported results on a GAAP basis as part of our earnings press release. Today's call is being webcast and a recording of this conference call will be available on the CrossAmerica website for a period of 60 days. Speaker 100:02:31With that, I will now turn the call over to Charles. Speaker 200:02:37Thank you, Maura. As always, Maura and I appreciate everyone joining us, And thank you for making the time to listen to the call this morning. During today's call, I will briefly go through the operating highlights for the Q3. I will also provide color on the market and a few other updates similar to what I provided on previous calls. Mark will then review in more detail the financial results. Speaker 200:03:01Now if you turn to slide 4, I will briefly review some of our operating results. For the Q3 of 2023, Our wholesale fuel gross profit declined 4 percent to $18,800,000 compared to $19,500,000 in the Q3 of 2022. The decline was driven by a decrease in fuel margin, partially offset by an increase in fuel volume. Wholesale segment gross profit was $32,900,000 a decrease of 4% when compared to the $34,100,000 of wholesale gross profit in the Q3 of 2022. Our wholesale fuel margin declined 7% from $0.092 per gallon in the Q3 of 2022 to $0.086 per gallon in the Q3 of 2023. Speaker 200:03:51The decline was primarily driven by the following two factors. The first was an exceptionally strong fuel margin performance of our veritably priced wholesale business in the Q3 of 2022 relative to the current year. If you recall, We and the industry experienced an exceptionally strong fuel margin environment in the Q3 of 2022. While the Q3 of 2023 was a generally favorable environment for fuel margins, it was not nearly as favorable as the fuel margin environment in the prior year. The second factor was that crude oil prices were lower during the quarter compared to the prior year and the year over year decrease in fuel margin was primarily driven by the resultant lower cost of motor fuel during the quarter and the corresponding decrease in the dollar value of the terms discounts on certain gallons purchased during the quarter. Speaker 200:04:42This was partially offset by our improved fuel sourcing costs, which resulted from our continued ongoing efforts to lower our cost of products. Our wholesale volume was 217 3,000,000 gallons for the Q3 of 2023 compared to 212,700,000 gallons in the Q3 of 2022. The 2% increase in volume when compared to the same period in 2022 was largely due to the community service station assets acquired during the Q4 of 2022, partially offset by the conversion of certain lessee dealer locations to our retail class of trade and lower volume in our same store business. Since I just mentioned the community service station assets, we closed on that transaction approximately 1 year ago. These assets have been great additions to the portfolio and this past year performed better than our expectations for them at the time of acquisition. Speaker 200:05:40Returning to volume, for the quarter, our same store volume in the wholesale segment was down approximately 1.2% year over year. We saw declining same store volumes in the last few weeks of the quarter, which has continued in the period since the quarter's end, with same store wholesale volume down 2% to 3% year over year in this period. Regarding our wholesale rent, Our base rent for the quarter was $13,000,000 compared to the prior year of $13,800,000 a slight decrease due to the conversion of certain lessee dealer sites to company operated locations that occurred earlier this year. Aside from the decrease in rent due to the class of trade changes, Our rental income continues to be a durable income stream in our business. For the Retail segment, Despite the challenging year over year comparisons due to the exceptionally strong fuel margins of the Q3 of 2022, our Retail segment performed very well during the Q3 of 2023, generating $67,600,000 in gross profit, While our motor fuel gross profit declined 34%, our merchandise gross profit increased 23% for the quarter when compared to the same period in 2022. Speaker 200:06:54For volume, on a same store basis, our retail volume increased 2% for the quarter year over year. As in our wholesale segment, we saw year over year volume performance decline in the latter part of the quarter. In the period since the quarter end, same store volume has declined in the mid single digits, driven by some site specific issues in certain geographies and an unfavorable comparison to particularly strong prior year performance. On the fuel margin front, Our retail fuel margin on a $0.01 per gallon basis declined 30% year over year as we experienced exceptionally strong fuel margins at $0.534 per gallon in the Q3 of 2022. However, On an absolute basis, our quarterly retail fuel margin of $0.372 per gallon was strong and up from the 2nd quarter retail fuel margin. Speaker 200:07:47And while fuel volumes have been lower since the quarter end, as I noted a moment ago, fuel margins since the quarter end have generally been higher than what we experienced in the Q3. For inside sales, on a same site basis, our inside sales increased approximately 4% relative to last year. Inside sales, excluding cigarettes, were up approximately 9% year over year on a same store basis. The strong sales performance was generally across all categories, with packaged beverages and our food categories performing particularly well. On the store merchandise margin front, Our merchandise gross margin increased 23 percent to $25,400,000 driven by our increased sales from the higher store count, the increase in same store sales and improvement in our store merchandise gross margin percentage. Speaker 200:08:39Our store merchandise gross margin percentage was up 160 basis points year over year. The store merchandise margin improvement was due to merchandise sales shifts towards higher margin categories and certain initiatives we have in place in regards to pricing, product sourcing and promotions. In the period since quarter end, same store inside sales inclusive of cigarettes are up approximately 3% to 5% over the prior year. As we noted last quarter, in our Retail segment, if you look at our company operated site count, we are up approximately 40 retail sites from the prior year, but flat from the Q2 of this year. The increase in site count relative to the prior year is due to our conversion of certain controlled sites from other classes of trade to company operated sites earlier in the year. Speaker 200:09:28Although in the Q3, we did not have any significant conversion activity, We expect to continue to convert additional sites from other classes of trade to company operated retail sites or to a lesser extent Retail commission sites going forward. For the sites we do convert to company operated retail or commission locations, We believe that we can generate more profitability from these locations and enhance these sites' long term value through operating these sites ourselves. Overall, despite the challenging year over year comparison to last year's retail fuel margin, it was a positive quarter for our retail segment at same store volume, same store merchandise sales, same store merchandise gross margin and store merchandise margin percentage were all up relative to the prior year. On the divestiture front, we had a quiet quarter, selling only 1 property this quarter after selling 6 properties in the 2nd quarter. Year to date, we have sold 8 properties for approximately $8,300,000 in proceeds. Speaker 200:10:27We continuously look at our portfolio to identify potential divestiture locations and it remains a focus of ours to free up capital in this manner, which we will either put towards reducing leverage or investing in growth opportunities. Overall, the business continues to perform well across many different operating environments. The underlying fundamentals remain strong. Our balance sheet is healthy and positioned well for the current interest rate environment, and we continue to work hard on executing our initiatives and constantly improving the business. We cannot be successful without great people. Speaker 200:11:01So thank you to all the CrossAmerica team members who work hard every day to generate results and to drive the business forward. With that, I will turn it over to Mara for a more detailed financial review. Speaker 100:11:17Thank you, Charles. If you would please turn to slide 6, I would like to review our 3rd quarter results for the partnership. We reported net income of $12,300,000 for the Q3 of 2023 compared to net income of $27,600,000 in the Q3 of 2022. The decline in net income was primarily due to the very elevated fuel margins that we experienced in the Q3 of 2022, as Charles noted earlier. Adjusted EBITDA was $44,200,000 for the Q3 of 2023 compared to adjusted EBITDA of $62,600,000 for the Q3 of 2022. Speaker 100:12:00Our distributable cash flow for the Q3 of 2023 was $31,400,000 versus $50,900,000 for the Q3 of 2022. The decrease in distributable cash flow was primarily again due to the exceptionally strong results in the Q3 of 2022, in addition to an increase in cash interest expense that also impacted our 3rd quarter net income. Our distribution coverage for the current quarter was 1.57 times compared to 2.55 times for the Q3 of 2022. On a trailing 12 month basis, our distribution coverage was 1.43 times for the 12 months ended September 30, 2023 compared to 1.74 times for the comparable period ended September 30, 2022. These strong distribution coverage ratio statistics provide continuing evidence of the strength of our business as our team continues to execute on our organizational goals. Speaker 100:13:08The partnership paid a distribution of $0.525 per unit during the Q3 of 2023, attributable to the Q2 of 2023 for a total of almost $20,000,000 Charles discussed some of the primary drivers of our top line and gross profit performance for the quarter earlier. Turning to the expense portion of our operations. Operating expenses for the Q3 increased $3,800,000 compared to the 2022 Q3. As with last quarter, the increase was primarily driven by incremental operating expenses in our Retail segment due to the conversion of lessee dealer and commission locations to company operated locations earlier this year. The incremental operating expense for the number of locations we converted to company operated retail locations is in line with our expectations for these sites as they are converted to company operated locations. Speaker 100:14:09Adjusting for the known incremental operating expenses we add to the business when converting a store to the company operated cost of trade. The increase in our other operating expenses was below the inflation levels being experienced in the wider economy. This is a meaningfully moderated operating expense profile than we have seen for the past 18 months, though we continue to monitor the impacts of inflationary cost pressures on our business. The largest driver of operating expenses are our store labor costs, which are primarily the result of the number of labor hours our stores are staffed and wages. Year over year, Our same store labor hours are up approximately 2% as our team has continued their focus on ensuring our stores are open and appropriately staffed to meet customer needs. Speaker 100:15:07Although we have experienced year over year cost pressures In the area of maintenance and supplies spending, these have been offset by our team's continued focus on cost management in other areas of the business, which have benefited us in this recently completed quarter. Our G and A expenses increased 4% for the quarter year over year, So this was primarily driven by higher equity compensation expense with all other G and A expenses roughly flat year over year. Moving to the next slide, we spent a total of $10,400,000 on capital expenditures during the 3rd quarter, with $8,500,000 of that total being growth related capital expenditures. This was in line with our Q3 of $10,400,000 which included spending for our rebranding efforts related to the acquisition of assets from 711 in 2021. During this past quarter, growth related capital spending included image upgrades that are being funded primarily through incentives from our fuel suppliers. Speaker 100:16:19As of September 30, 2023, our total credit facility balance was $762,500,000 up slightly from our June 30, 2023 balance of $761,500,000 and below our end of 2022 balance of $765,100,000 During the Q3 of 2023, we experienced a generally rising fuel price environment, which resulted in a usage of working capital during the quarter. We also will continue to receive the fuel supplier incentive funds related to our image upgrade projects in future quarters as upgrades are completed. These two net uses of capital during the quarter are generally items we consider timing matters and drove the roughly flat quarter over quarter balance on our credit facility. Our credit facility defined leverage ratio was 4.35 times as of September 30, 2023. We continue to remain focused on our operational performance and associated cash flow generation to manage our leverage ratio at approximately 4 times on a credit facility defined basis. Speaker 100:17:41Additionally, although we have felt the impact of the elevated interest rate environment, as with prior periods, We continue to benefit from the interest rate swaps we put into place in early 2020 and recently in April 2023. Approximately 65% of our current credit facility balance is swapped to fixed rates. As of September 30, 2023, taking the interest rate swap contracts the partnership currently has in place into account, Our effective interest rate on the Cabell credit facility was 4.9%, which is an attractive rate against the current rate backdrop. In conclusion, as Charles noted, despite this quarter's year over year comparisons, We had a strong Q3 with positive performance in fuel and merchandise gross profit in our Retail segment. We ended the quarter with a strong balance sheet with a continued focus on maintaining a leverage profile that provides us with flexibility to opportunistically invest in our business. Speaker 100:18:52We appreciate the efforts of all of our team members around the country during this past busy summer season that is most of our Q3, and we look forward to continuing Our strong performance into the Q4 and 2024. With that, we will open it up for questions. Operator00:19:16Thank you. Ladies and gentlemen, we will now begin the question and answer Speaker 100:19:23mode. Operator00:19:29In the order they are received. One moment please for your first question. Speaker 200:19:57Well, it doesn't appear we have any questions today. Should you have any questions later, please feel free to reach out to us. As always, thank you for joining us and have a great day. Operator00:20:12Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Thank you.Read morePowered by