NYSE:CAPL CrossAmerica Partners Q1 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-$0.04Consensus EPS $0.10Beat/MissMissed by -$0.14One Year Ago EPSN/ACrossAmerica Partners Revenue ResultsActual Revenue$1.02 billionExpected Revenue$1.04 billionBeat/MissMissed by -$27.14 millionYoY Revenue GrowthN/ACrossAmerica Partners Announcement DetailsQuarterQ1 2023Date5/8/2023TimeN/AConference Call DateTuesday, May 9, 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 Q1 2023 Earnings Call TranscriptProvided by QuartrMay 9, 2023 ShareLink copied to clipboard.There are 4 speakers on the call. Operator00:00:01Welcome to the CrossAmerica Partners 4th Quarter and Full Year 2022 Earnings Call. My name is Hilda, and I will be your operator for today's call. Please note that this conference is being recorded. I will now turn the call over to Maura Topper. You may begin. Speaker 100:00:25Thank you, operator. Good morning, and thank you for joining the CrossAmerica Partners Q1 2023 earnings call. With me today is Charles Nifong, CEO and President. Charles will provide some opening comments, A brief overview of CrossAmerica's operational performance and highlights from the quarter, and then I will discuss the financial results. At the end, we will open up the call to questions. Speaker 100:00:51I should point out that today's call will follow some presentation slides that we will utilize during this morning's event. These slides 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 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. Speaker 100:01:47Forward 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. During 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. Speaker 100:02:20Today'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. With that, I will now turn the call over to Charles. Speaker 200:02:36Thank you, Maura. Maura and I appreciate everyone joining us today. We thank you for making the time and your schedule to be with us this morning. During today's call, I will briefly go through some of the operating highlights for the Q1. I will also provide some color on the market and a few other updates similar to what I provided on previous calls. Speaker 200:02:58Laura will then review in more detail the financial results. Now if you turn to Slide 4, I will briefly review some of our operating results. For the Q1 of 2023, our wholesale fuel gross profit increased 3% to $16,700,000 compared to $16,200,000 in the Q1 of 2022. This growth was driven by an increase in fuel margin. Wholesale segment gross profit was $31,200,000 an increase of 3% when compared to $30,300,000 per gallon in the Q1 of 2022 to $0.083 per gallon in the Q1 of 2023. Speaker 200:03:48The year over year increase was primarily driven by better sourcing costs as a result of brand consolidation and other fuel sourcing initiatives, Offsets by lower terms discounts for certain of our fuel sourcing costs, which was driven by lower crude prices for the quarter compared to the prior year. Our wholesale volume was 201,900,000 gallons for the Q1 of 2023, compared to 203,900,000 gallons in the Q1 of 2022. The decline in volume when compared to the same period in 2022 was largely due to lower volume in our base business, partially offset by the acquisition of assets from community service stations that was completed in the Q4 of 2022. The 1st quarter wholesale results include the 1st full quarter of our Community Service Stations acquisition and our financial results. The acquisition is performing in line with our expectations and we are pleased to have these high quality assets and our portfolio. Speaker 200:04:51For the quarter, on a national basis, based on Energy Information Administration data, Gasoline volume was approximately flat compared to the prior year. Volume was generally weaker early in the quarter compared to the prior year, while the latter weeks of the quarter were stronger than the prior year. Since the quarter end, NASHIA volume has been slightly higher than the prior year. In our wholesale segment, same store volume was down approximately 4% overall for the quarter. In the period since the quarter end, Same store volume has been flat year over year, in line with the national volume data I just provided. Speaker 200:05:26Our overall same store volume across our entire portfolio was down around 2% for the quarter, driven by strong volume in our Retail segment, which I will address later in my comments. On our wholesale rent, our base rent for the quarter was $13,700,000 compared to the prior year of $13,200,000 a slight increase Due to the renewal of certain dealer contracts and the reopening of certain previously closed sites. As in our prior quarters, our rental income continues to be a durable income stream in our business. Our Retail segment performed well during the quarter as gross profit increased 5% are $2,300,000 when compared to the Q1 of 2022. Our motor fuel gross profit increased 2% and our merchandise gross profit increased 9% when compared to the same period in 2022. Speaker 200:06:22For volume on a same store basis, our total retail volume increased 2% for the quarter year over year, outperforming the national volume data I touched on earlier in my comments. In general, our retail segment volume has performed well relative to national demand data as we keep a sharp focus on retail pricing in our operations to ensure we are priced appropriately at all our retail locations. In the period since the quarter end, retail same store volume has been up in the low single digits Relative to the prior year, continuing the outperformance relative to national volume data that occurred during the quarter. On the margin front, our retail margin on a cents per gallon basis was relatively flat year over year. For this year and the prior year, Retail fuel margins for the Q1 were significantly stronger than what retail fuel margins typically were for 1st quarters prior to COVID. Speaker 200:07:15In the period since quarter end, retail fuel margins have generally been slightly higher than the results from the Q1. 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 10% year over year on a same store basis. The strong sales performance was driven particularly by higher sales in the packaged beverage and snacks categories. On the margin front, our store margin was up approximately 100 basis points year over year to impart a strong sales performance in higher margin categories as well as certain initiatives we have in place in regards to pricing, product sourcing and promotions. Speaker 200:08:00In the period since the quarter end, same store inside sales are up between 3% to 5% over the prior year. As I noted in my earlier comments, the Retail segment was up in same store volume, same store inside sales and store margin for the quarter relative to the prior year. These strong results reflect the success of various initiatives we have ongoing in the business, The strong performance of our JKN portfolio and overall solid execution. As we noted throughout 2022, We continue to evaluate our portfolio and look for opportunities to divest non core properties. The Q1 of 2023 was relatively light, divesting 1 property for $400,000 Subsequent to the quarter end, we sold an additional 2 properties for a total of $6,600,000 Finally, I want us to note that we refinanced our credit facilities at the end of the Q1. Speaker 200:08:55We consolidated our credit facilities into a single facility and extended the duration out for 5 additional years. The refinancing simplifies our capital structure and our operations and provides us the necessary liquidity and capital we need for the business going forward. We are particularly pleased at the level of support we received in the refinancing As we had strong demand from our banking partners and the facility was well oversubscribed that we were able to achieve this result and complete the refinancing in the midst of a banking crisis speaks to the strong financial performance of our business and the strength of our banking relationships. With that, I will turn it over to Maura for a more detailed financial review. Speaker 100:09:39Thank you, Charles. If you would please turn to Slide 6, I would like to review our Q1 results for the partnership. We reported a net loss of just under $1,000,000 for the Q1 of 2023 compared to net income of $5,000,000 in the Q1 of 2022. A decline in net income was primarily driven by the year over year increase and interest expense due to the elevated interest rate environment. We did experience an increase in gross profit in the wholesale and retail segments, with each segment benefiting from the favorable fuel margin environment that Charles spoke about in his comments, which was offset by an increase in operating expenses. Speaker 100:10:22Adjusted EBITDA was $31,700,000 for the Q1 of 2023, which was a slight decrease of 1% when compared to adjusted EBITDA of $32,000,000 for the Q1 of 2022. Our distributable cash flow for the Q1 of 2023 was $19,100,000 versus $24,400,000 for the Q1 of 2022. The decrease in distributable cash flow was primarily due to the increase in cash interest expense that impacted our Q1 net income. I'll speak further in a few moments about the interest rate environment and some steps We've recently taken to continue to manage this line item and our credit facility overall. Our distribution coverage for the current quarter was 0.96x compared to 1.22x for the Q1 of 2022, reflecting the seasonality of our business that we have historically seen since the partnership went public. Speaker 100:11:25On a trailing 12 month basis, our distribution coverage was 1.7 times for the 12 months ended March 31, 2023, compared to 1.39 times for the comparable period ended March 31, 2022. The business overall continues to benefit from the strategic initiatives and growth opportunities we have acted upon over the past 3 years, resulting in the strengthening of our distribution coverage ratio. The partnership paid a distribution of $0.525 per unit during the Q1 of 2023 attributable to the Q4 of 2022 for a total of almost $20,000,000 Turning to the expense portion of our operations. Operating expenses for the Q1 increased $3,500,000 or 8% compared to the 2022 Q1. This increase was primarily due to increased store level employment costs for our company operated locations. Speaker 100:12:30Improved staffing conditions and expanded hours of operation at many of our company operated sites led to an approximately 6% increase in labor hours during the quarter compared to the prior year. Store level employment costs were also impacted by higher wages. Increases in costs for environmental and maintenance spending, primarily due to inflation, also impacted the quarter. Our G and A expenses decreased over 11% for the quarter year over year. This was primarily due to a decrease in acquisition costs with last year's Q1, including legal fees and other acquisition related costs associated with the 711 sites that we acquired. Speaker 100:13:17Moving to the next slide, we spent a total of $6,000,000 on capital expenditures during the Q1, with $4,000,000 of that total being growth related capital expenditures. Operator00:13:29This was a Speaker 100:13:29decline from the Q1 of 2022 spend of $8,900,000 which included spending for our rebranding efforts related to the acquisition of assets from 711. During this past quarter, growth related capital spending included targeted investments in dispensers as well as store upgrade and rebranding work. As Charles mentioned earlier, We amended and restated the Cap L credit facility on March 31, 2023 with a syndicate of lenders led by Citizens Bank. The 5 year revolving credit facility provides borrowing capacity of up to $925,000,000 An increase from the previous revolving credit facility capacity of $750,000,000 Additionally, we have an accordion feature in the facility that can be accessed subject to terms and conditions for up to an additional $350,000,000 of borrowing capacity. As part of the amendment and restatement, proceeds from the amended facility were used to repay a $159,000,000 term loan balance outstanding on the JKM credit facility. Speaker 100:14:42The JKM credit facility was then terminated, which eliminated our current pay obligations. As Charles noted, Consolidation of our borrowings into one revolving credit facility provides us with a simplified capital structure and the capital needed to continue to operate our business at a high level. As of March 31, 2023, Our credit facility defined leverage ratio was 4.05 times compared to 4.6 times at the end of the Q1 of 2022. This improved leverage profile, a function of our operational performance and cash flow generation over the past year, and provides us with opportunity and flexibility as we move forward. As I noted earlier, our quarterly results We're impacted by the elevated interest rate environment and its impacting impacts on our interest expense. Speaker 100:15:38As of prior periods, We continue to benefit from the interest rate swaps we put into place in early 2020. As part of the Cap L credit facility amendment process, We amended those 2020 swap contracts from a LIBOR basis to a SOFR basis, resulting in an average fixed rate for those contracts of 35.5 basis points. Additionally, in April 2023, We entered into 3 new SOFR based spot start interest rate swap contracts with a total notional value of $200,000,000 and a 5 year term. These spot start interest rate swaps have a fixed rate of approximately 3.3%. We also entered into one forward starting interest rate swap contract beginning April 1, 2024, with a total notional value of $100,000,000 and a 4 year term. Speaker 100:16:36The fixed rate on the forward starting interest rate swap contract is 2.9%. These additional interest rate swaps provide us with increased certainty around our interest expense moving forward, a valuable hedge against the impacts of a rising rate environment and immediate interest savings based on where market interest rates are today. In conclusion, as Charles noted, we had a solid Q1 with positive performance in fuel and merchandise gross profit despite some economic headwinds. We set our balance sheet up with flexibility and capacity for future opportunities with the simplification of our borrowing structure, and we'll continue to focus on operating the business well, maximizing the value and cash flows from each site in our portfolio and preparing for the summer drive season ahead. With that, we will open it up for questions. Speaker 300:17:32Thank you. We will now begin the question and answer session. Presenters, we have no questions in queue at this time. Speaker 200:18:34Okay. Everyone, this is Charles again. Thank you for joining us today in the call. Should you have questions later, feel free to reach out to us. We'll be happy to take them. Speaker 200:18:43Again, thanks for joining us today. Have a great day. Speaker 300:18:48Thank you, ladies and gentlemen. This concludes today's conference. Thank you for your participation. At this time, you may disconnect from the call.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallCrossAmerica Partners Q1 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 Trump Dump is starting; Get out of stocks now?The first 365 days of the Trump presidency… Will be the best time to get rich in American history.April 18, 2025 | Paradigm Press (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? Why Analysts Boosted United Airlines Stock Ahead of EarningsLamb Weston Stock Rises, Earnings Provide Calm Amidst ChaosIntuitive Machines Gains After Earnings Beat, NASA Missions Ahead Upcoming Earnings Tesla (4/22/2025)Intuitive Surgical (4/22/2025)Verizon Communications (4/22/2025)Canadian National Railway (4/22/2025)Novartis (4/22/2025)RTX (4/22/2025)3M (4/22/2025)Capital One Financial (4/22/2025)General Electric (4/22/2025)Danaher (4/22/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. Start Your 30-Day Trial MarketBeat All Access Features Best-in-Class Portfolio Monitoring Get personalized stock ideas. Compare portfolio to indices. Check stock news, ratings, SEC filings, and more. Stock Ideas and Recommendations See daily stock ideas from top analysts. Receive short-term trading ideas from MarketBeat. Identify trending stocks on social media. Advanced Stock Screeners and Research Tools Use our seven stock screeners to find suitable stocks. Stay informed with MarketBeat's real-time news. Export data to Excel for personal analysis. Sign in to your free account to enjoy these benefits In-depth profiles and analysis for 20,000 public companies. Real-time analyst ratings, insider transactions, earnings data, and more. Our daily ratings and market update email newsletter. Sign in to your free account to enjoy all that MarketBeat has to offer. Sign In Create Account Your Email Address: Email Address Required Your Password: Password Required Log In or Sign in with Facebook Sign in with Google Forgot your password? Your Email Address: Please enter your email address. Please enter a valid email address Choose a Password: Please enter your password. Your password must be at least 8 characters long and contain at least 1 number, 1 letter, and 1 special character. Create My Account (Free) or Sign in with Facebook Sign in with Google By creating a free account, you agree to our terms of service. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
There are 4 speakers on the call. Operator00:00:01Welcome to the CrossAmerica Partners 4th Quarter and Full Year 2022 Earnings Call. My name is Hilda, and I will be your operator for today's call. Please note that this conference is being recorded. I will now turn the call over to Maura Topper. You may begin. Speaker 100:00:25Thank you, operator. Good morning, and thank you for joining the CrossAmerica Partners Q1 2023 earnings call. With me today is Charles Nifong, CEO and President. Charles will provide some opening comments, A brief overview of CrossAmerica's operational performance and highlights from the quarter, and then I will discuss the financial results. At the end, we will open up the call to questions. Speaker 100:00:51I should point out that today's call will follow some presentation slides that we will utilize during this morning's event. These slides 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 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. Speaker 100:01:47Forward 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. During 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. Speaker 100:02:20Today'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. With that, I will now turn the call over to Charles. Speaker 200:02:36Thank you, Maura. Maura and I appreciate everyone joining us today. We thank you for making the time and your schedule to be with us this morning. During today's call, I will briefly go through some of the operating highlights for the Q1. I will also provide some color on the market and a few other updates similar to what I provided on previous calls. Speaker 200:02:58Laura will then review in more detail the financial results. Now if you turn to Slide 4, I will briefly review some of our operating results. For the Q1 of 2023, our wholesale fuel gross profit increased 3% to $16,700,000 compared to $16,200,000 in the Q1 of 2022. This growth was driven by an increase in fuel margin. Wholesale segment gross profit was $31,200,000 an increase of 3% when compared to $30,300,000 per gallon in the Q1 of 2022 to $0.083 per gallon in the Q1 of 2023. Speaker 200:03:48The year over year increase was primarily driven by better sourcing costs as a result of brand consolidation and other fuel sourcing initiatives, Offsets by lower terms discounts for certain of our fuel sourcing costs, which was driven by lower crude prices for the quarter compared to the prior year. Our wholesale volume was 201,900,000 gallons for the Q1 of 2023, compared to 203,900,000 gallons in the Q1 of 2022. The decline in volume when compared to the same period in 2022 was largely due to lower volume in our base business, partially offset by the acquisition of assets from community service stations that was completed in the Q4 of 2022. The 1st quarter wholesale results include the 1st full quarter of our Community Service Stations acquisition and our financial results. The acquisition is performing in line with our expectations and we are pleased to have these high quality assets and our portfolio. Speaker 200:04:51For the quarter, on a national basis, based on Energy Information Administration data, Gasoline volume was approximately flat compared to the prior year. Volume was generally weaker early in the quarter compared to the prior year, while the latter weeks of the quarter were stronger than the prior year. Since the quarter end, NASHIA volume has been slightly higher than the prior year. In our wholesale segment, same store volume was down approximately 4% overall for the quarter. In the period since the quarter end, Same store volume has been flat year over year, in line with the national volume data I just provided. Speaker 200:05:26Our overall same store volume across our entire portfolio was down around 2% for the quarter, driven by strong volume in our Retail segment, which I will address later in my comments. On our wholesale rent, our base rent for the quarter was $13,700,000 compared to the prior year of $13,200,000 a slight increase Due to the renewal of certain dealer contracts and the reopening of certain previously closed sites. As in our prior quarters, our rental income continues to be a durable income stream in our business. Our Retail segment performed well during the quarter as gross profit increased 5% are $2,300,000 when compared to the Q1 of 2022. Our motor fuel gross profit increased 2% and our merchandise gross profit increased 9% when compared to the same period in 2022. Speaker 200:06:22For volume on a same store basis, our total retail volume increased 2% for the quarter year over year, outperforming the national volume data I touched on earlier in my comments. In general, our retail segment volume has performed well relative to national demand data as we keep a sharp focus on retail pricing in our operations to ensure we are priced appropriately at all our retail locations. In the period since the quarter end, retail same store volume has been up in the low single digits Relative to the prior year, continuing the outperformance relative to national volume data that occurred during the quarter. On the margin front, our retail margin on a cents per gallon basis was relatively flat year over year. For this year and the prior year, Retail fuel margins for the Q1 were significantly stronger than what retail fuel margins typically were for 1st quarters prior to COVID. Speaker 200:07:15In the period since quarter end, retail fuel margins have generally been slightly higher than the results from the Q1. 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 10% year over year on a same store basis. The strong sales performance was driven particularly by higher sales in the packaged beverage and snacks categories. On the margin front, our store margin was up approximately 100 basis points year over year to impart a strong sales performance in higher margin categories as well as certain initiatives we have in place in regards to pricing, product sourcing and promotions. Speaker 200:08:00In the period since the quarter end, same store inside sales are up between 3% to 5% over the prior year. As I noted in my earlier comments, the Retail segment was up in same store volume, same store inside sales and store margin for the quarter relative to the prior year. These strong results reflect the success of various initiatives we have ongoing in the business, The strong performance of our JKN portfolio and overall solid execution. As we noted throughout 2022, We continue to evaluate our portfolio and look for opportunities to divest non core properties. The Q1 of 2023 was relatively light, divesting 1 property for $400,000 Subsequent to the quarter end, we sold an additional 2 properties for a total of $6,600,000 Finally, I want us to note that we refinanced our credit facilities at the end of the Q1. Speaker 200:08:55We consolidated our credit facilities into a single facility and extended the duration out for 5 additional years. The refinancing simplifies our capital structure and our operations and provides us the necessary liquidity and capital we need for the business going forward. We are particularly pleased at the level of support we received in the refinancing As we had strong demand from our banking partners and the facility was well oversubscribed that we were able to achieve this result and complete the refinancing in the midst of a banking crisis speaks to the strong financial performance of our business and the strength of our banking relationships. With that, I will turn it over to Maura for a more detailed financial review. Speaker 100:09:39Thank you, Charles. If you would please turn to Slide 6, I would like to review our Q1 results for the partnership. We reported a net loss of just under $1,000,000 for the Q1 of 2023 compared to net income of $5,000,000 in the Q1 of 2022. A decline in net income was primarily driven by the year over year increase and interest expense due to the elevated interest rate environment. We did experience an increase in gross profit in the wholesale and retail segments, with each segment benefiting from the favorable fuel margin environment that Charles spoke about in his comments, which was offset by an increase in operating expenses. Speaker 100:10:22Adjusted EBITDA was $31,700,000 for the Q1 of 2023, which was a slight decrease of 1% when compared to adjusted EBITDA of $32,000,000 for the Q1 of 2022. Our distributable cash flow for the Q1 of 2023 was $19,100,000 versus $24,400,000 for the Q1 of 2022. The decrease in distributable cash flow was primarily due to the increase in cash interest expense that impacted our Q1 net income. I'll speak further in a few moments about the interest rate environment and some steps We've recently taken to continue to manage this line item and our credit facility overall. Our distribution coverage for the current quarter was 0.96x compared to 1.22x for the Q1 of 2022, reflecting the seasonality of our business that we have historically seen since the partnership went public. Speaker 100:11:25On a trailing 12 month basis, our distribution coverage was 1.7 times for the 12 months ended March 31, 2023, compared to 1.39 times for the comparable period ended March 31, 2022. The business overall continues to benefit from the strategic initiatives and growth opportunities we have acted upon over the past 3 years, resulting in the strengthening of our distribution coverage ratio. The partnership paid a distribution of $0.525 per unit during the Q1 of 2023 attributable to the Q4 of 2022 for a total of almost $20,000,000 Turning to the expense portion of our operations. Operating expenses for the Q1 increased $3,500,000 or 8% compared to the 2022 Q1. This increase was primarily due to increased store level employment costs for our company operated locations. Speaker 100:12:30Improved staffing conditions and expanded hours of operation at many of our company operated sites led to an approximately 6% increase in labor hours during the quarter compared to the prior year. Store level employment costs were also impacted by higher wages. Increases in costs for environmental and maintenance spending, primarily due to inflation, also impacted the quarter. Our G and A expenses decreased over 11% for the quarter year over year. This was primarily due to a decrease in acquisition costs with last year's Q1, including legal fees and other acquisition related costs associated with the 711 sites that we acquired. Speaker 100:13:17Moving to the next slide, we spent a total of $6,000,000 on capital expenditures during the Q1, with $4,000,000 of that total being growth related capital expenditures. Operator00:13:29This was a Speaker 100:13:29decline from the Q1 of 2022 spend of $8,900,000 which included spending for our rebranding efforts related to the acquisition of assets from 711. During this past quarter, growth related capital spending included targeted investments in dispensers as well as store upgrade and rebranding work. As Charles mentioned earlier, We amended and restated the Cap L credit facility on March 31, 2023 with a syndicate of lenders led by Citizens Bank. The 5 year revolving credit facility provides borrowing capacity of up to $925,000,000 An increase from the previous revolving credit facility capacity of $750,000,000 Additionally, we have an accordion feature in the facility that can be accessed subject to terms and conditions for up to an additional $350,000,000 of borrowing capacity. As part of the amendment and restatement, proceeds from the amended facility were used to repay a $159,000,000 term loan balance outstanding on the JKM credit facility. Speaker 100:14:42The JKM credit facility was then terminated, which eliminated our current pay obligations. As Charles noted, Consolidation of our borrowings into one revolving credit facility provides us with a simplified capital structure and the capital needed to continue to operate our business at a high level. As of March 31, 2023, Our credit facility defined leverage ratio was 4.05 times compared to 4.6 times at the end of the Q1 of 2022. This improved leverage profile, a function of our operational performance and cash flow generation over the past year, and provides us with opportunity and flexibility as we move forward. As I noted earlier, our quarterly results We're impacted by the elevated interest rate environment and its impacting impacts on our interest expense. Speaker 100:15:38As of prior periods, We continue to benefit from the interest rate swaps we put into place in early 2020. As part of the Cap L credit facility amendment process, We amended those 2020 swap contracts from a LIBOR basis to a SOFR basis, resulting in an average fixed rate for those contracts of 35.5 basis points. Additionally, in April 2023, We entered into 3 new SOFR based spot start interest rate swap contracts with a total notional value of $200,000,000 and a 5 year term. These spot start interest rate swaps have a fixed rate of approximately 3.3%. We also entered into one forward starting interest rate swap contract beginning April 1, 2024, with a total notional value of $100,000,000 and a 4 year term. Speaker 100:16:36The fixed rate on the forward starting interest rate swap contract is 2.9%. These additional interest rate swaps provide us with increased certainty around our interest expense moving forward, a valuable hedge against the impacts of a rising rate environment and immediate interest savings based on where market interest rates are today. In conclusion, as Charles noted, we had a solid Q1 with positive performance in fuel and merchandise gross profit despite some economic headwinds. We set our balance sheet up with flexibility and capacity for future opportunities with the simplification of our borrowing structure, and we'll continue to focus on operating the business well, maximizing the value and cash flows from each site in our portfolio and preparing for the summer drive season ahead. With that, we will open it up for questions. Speaker 300:17:32Thank you. We will now begin the question and answer session. Presenters, we have no questions in queue at this time. Speaker 200:18:34Okay. Everyone, this is Charles again. Thank you for joining us today in the call. Should you have questions later, feel free to reach out to us. We'll be happy to take them. Speaker 200:18:43Again, thanks for joining us today. Have a great day. Speaker 300:18:48Thank you, ladies and gentlemen. This concludes today's conference. Thank you for your participation. At this time, you may disconnect from the call.Read morePowered by