NYSE:CAPL CrossAmerica Partners Q1 2024 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 -$0.01Beat/MissMissed by -$0.03One Year Ago EPSN/ACrossAmerica Partners Revenue ResultsActual Revenue$941.55 millionExpected Revenue$1.17 billionBeat/MissMissed by -$227.42 millionYoY Revenue GrowthN/ACrossAmerica Partners Announcement DetailsQuarterQ1 2024Date5/8/2024TimeN/AConference Call DateThursday, May 9, 2024Conference Call Time9:00AM ETUpcoming EarningsCrossAmerica Partners' Q1 2025 earnings is scheduled for Wednesday, May 7, 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 2024 Earnings Call TranscriptProvided by QuartrMay 9, 2024 ShareLink copied to clipboard.There are 3 speakers on the call. Operator00:00:00Good morning, ladies and gentlemen, and welcome to the CrossAmerica Partners First Quarter 2024 Earnings Conference Call. At this time, all lines are in listen only mode. Following the presentation, we will conduct a question and answer session. This call is being recorded on Thursday, May 9, 2020 4. I would now like to turn the conference over to Maura Topper, Chief Financial Officer. Operator00:00:40Please go ahead. Speaker 100:00:42Thank you, operator. Good morning, and thank you for joining the CrossAmerica Partners Q1 2024 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 an overview of CrossAmerica's operational performance for the quarter and then I will discuss the financial results. We will then open up the call to questions. Speaker 100:01:08Today'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 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 100:02:12During 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 100:02:41With that, I will now turn the call over to Charles. Speaker 200:02:46Thank you, Maura. Maura and I appreciate all of you joining us this morning as we review our Q1 results. During today's call, I will go through some of the operating highlights for the Q1 2024. I will also provide commentary on the market and other updates similar to what I have done on our prior calls. Laura will then review in more detail our financial results. Speaker 200:03:11Now if you turn to Slide 4, I will briefly review some of our operating results. For the Q1 of 2024, our wholesale segment gross profit declined 14% to $27,000,000 compared to $31,200,000 in the Q1 of 2023. The decrease was driven by a decline in fuel margin, fuel volume and rental income. A significant factor in the overall decline was the conversion of certain lessee dealer sites to company operated and commission agent sites, which are now accounted for in the retail segment. Our wholesale motor fuel gross profit decreased 13% to $14,600,000 in the Q1 of 2024 from $16,700,000 in the Q1 of 2023. Speaker 200:04:02Our fuel margin declined 5% from $0.083 per gallon in the Q1 of 2023 to $0.079 per gallon in the Q1 of 2024. The decrease in our wholesale fuel margin per gallon was primarily driven by the following factors. 1st, our average purchase price of motor fuel per gallon for the Q1 of 2024 was lower than our average purchase price of motor fuel per gallon for the Q1 of 2023, resulting in us receiving a lower dollar amount in terms discounts on certain gallons that we purchased during the quarter. 2nd, we experienced a gradual increase in crude oil prices throughout the Q1 of 2024. Historically, such a steady gradual increase in prices during a period leads to lower wholesale fuel margins per gallon in a year over year comparison due to its impact on our fuel margin and our variable margin priced wholesale contracts. Speaker 200:05:03Also contributing to the margin per gallon decline was a reduction in variable price wholesale fuel volume due to our conversion of certain sites to our retail class of trade. We did benefit this quarter from a reduction in our fuel sourcing cost. However, the benefit of these cost reductions was more than offset by the preceding factors that I just detailed. Our wholesale volume was 184,000,000 gallons for the Q1 of 2024 compared to 201,900,000 gallons in the Q1 of 2023, reflecting a decline of 9%. The decline in volume when compared to the same period in 2023 was primarily due to the conversion of certain lessee dealer sites to our retail class of trade and lower same site volume. Speaker 200:05:53The conversion of sites from wholesale to retail resulted in approximately 8,000,000 gallons of volume shifting segments for the quarter, which was approximately 47% of the total volume decline for the wholesale segment. These gallons are now reflected in our retail segment results. For the quarter, our same store volume in the wholesale segment was down slightly less than 2% year over year. The remaining decline in volume is attributable to loss of independent dealer contracts, which in many cases we chose not to renew. Based on national demand data available to us, our same store wholesale volume performance for the Q1 was better than overall national demand. Speaker 200:06:35In the period since the quarter end, same store volume has been down around 3% year over year. Overall, it was a soft start to the year for volume demand in the industry. Our quarterly wholesale same store volume results, while better on a relative basis than national data, are disappointing. Regarding our wholesale rent, our base rent for the quarter was $12,400,000 compared to the prior year of $13,700,000 a decrease due to the conversion of certain lessee dealer sites to company operated and commission agent sites. These rent dollars are no longer in the form of rent are now effectively in our retail segment results through higher margins at these locations. Speaker 200:07:18They are not lost dollars to the business, but are simply reported now in another segment of our financial results. For the Retail segment, considering the industry environment, our performance was good for the Q1 of 2024, primarily driven by our merchandise growth. The Retail segment generated $54,400,000 in gross profit compared to $50,900,000 for the same period in 2023, a 7% increase. Our merchandise gross profit increased 18% and our merchandise gross profit margin percentage was up approximately 30 basis points when compared to the same period in 2023. Our motor fuel gross profit declined 3%. Speaker 200:08:01On the fuel margin front, our retail fuel margin on a $0.01 per gallon basis decreased 3% year over year as our fuel margin was $0.308 per gallon in the Q1 of 2024 compared to $0.318 per gallon in the Q1 of 2023. Retail fuel margins were pressured this quarter by the generally steady rising price of crude oil during the quarter, which in turn pushed our fuel costs higher and adversely impacted retail street fuel pricing volatility. For volume on a same store basis, our retail volume declined 3% for the quarter year over year. On a relative basis to national demand data, our same store retail volume outperformed. However, on an absolute basis, it is a disappointing result and reflects the overall soft demand that we and the industry have experienced to start the year. Speaker 200:08:55In the period since the quarter end, retail same store volume has remained down at approximately 3% year over year, and retail fuel margins have continued to be roughly in line with our Q1 results. For inside sales on a same site basis, our inside sales were up slightly relative to last year for the Q1. Inside sales, excluding cigarettes, were up approximately 2% year over year on a same store basis for the quarter. The sales performance was primarily driven by the categories of packaged beverages and deli. On the store merchandise margin front, our merchandise gross profit increased 18% to $21,400,000 driven by our increased sales from the higher store count and improvement in our store merchandise gross margin percentage. Speaker 200:09:45The store merchandise margin improvement was due to our continued efforts and focus on our margins. In the period since the quarter end, same store sales have been flat to slightly down from the prior year, reflecting the ongoing soft demand environment. In our retail segment, if you look at our company operated site count, we are up 75 company operated retail sites from the prior year and up 47 sites relative to last quarter, Q4 of 2023. The increase in company operated site count relative to the Q4 was primarily driven by our conversion of the Applegreen lease locations to company operated retail sites. As we previously announced and also noted in our press release, we signed an agreement in January to terminate the lease and company operate 59 sites that we previously leased to Applegreen. Speaker 200:10:39Of these 59 locations, 31 locations were converted during the Q1 of 2024 and the remaining 28 locations converted in April 2024, so that as of today, all the locations are CrossAmerica company operated retail locations. We are pleased to welcome all the team members at these locations to the CrossAmerica team and thank everyone involved for their hard work in successfully executing this transaction. We expect this transaction to be immediately accretive to our retail segment and overall results. Our commission agent site count increased by 9 sites relative to the Q1 of 2023. In total, we have increased our overall retail site count by 85 sites as of today's date relative to the end of Q4. Speaker 200:11:29Based on those numbers, you can see that we were extremely active during quarter with site conversions and executing on our strategy to increase our exposure to retail fuel margins and the retail business overall. During the quarter, we did not divest any properties. Subsequent to the quarter end, we have divested 2 properties for $2,500,000 in proceeds. While the number of closed transactions is low year to date, we have been busy building our pipeline of divestitures and expect the pace and volume of transactions to increase materially for the remainder of the year. Overall, it was a challenging start to the year as our Q1 results reflect. Speaker 200:12:11The Q1 of the year is typically our weakest quarter of the year and this Q1 was a weak Q1 compared to prior 1st quarters. While our volume numbers compare favorably to national volume data, on an absolute basis, volume was below what we expect to achieve. In our retail sites, our store sales, while again better on a relative basis compared to nationally available data, were also below our expectations. Despite the soft financial results for the quarter, there were still positive developments in our business. One of the most significant was our conversion of the Applegreen sites to company operated retail locations. Speaker 200:12:51We were also able to convert 20 other locations this quarter to our retail class of trade, either as company operated sites or as commission retail locations. These conversions should generate better fuel volume and increased profitability at these sites going forward. Mara will touch on in her comments on some successes with expense management that we had during the quarter as well. So progress was made during the quarter, even if not evident in our financial results. And the best thing about the Q1 is that it leads into the spring summer, our peak months of the year. Speaker 200:13:27With that, I will turn it over to Maura for a more detailed financial review. Speaker 100:13:35Thank 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 $17,500,000 for the Q1 of 2024 compared to a net loss of $1,000,000 in the Q1 of 2023. This loss was primarily driven by a $15,900,000 loss on the lease termination with Applegreen and a decline in our year over year adjusted EBITDA. Regarding the lease termination charge for the Applegreen transaction, GAAP requires us to record substantially all of the price paid to Applegreen for the transaction, excluding amounts for inventory and equipment as an income statement expense as opposed to a balance sheet purchase, which drove the lease termination expense in the quarter. Speaker 100:14:24Adjusted EBITDA was $23,600,000 for the Q1 of 2024, a decline of $8,200,000 from adjusted EBITDA of $31,700,000 for the Q1 of 2023. Our distributable cash flow for the Q1 of 2024 was $11,700,000 compared to $19,100,000 for the Q1 of 2023. The declines in adjusted EBITDA and distributable cash flow were primarily due to operating income decreases in both our wholesale and retail segments, driven by the challenging fuel margin environment during the quarter and the additional operating expenses incurred primarily as a result of our higher company operated store count. Our distribution coverage for the current quarter was 0.59 times compared to 0.96 times for the Q1 of 2023. Our distribution coverage for the trailing 12 months ended March 31, 2024 was 1.37 times compared to 1.7 times for the same period ended March 31, 2023. Speaker 100:15:37The Q1 historically is our most challenging of the year with 9 out of the 12 first quarters in the Partnership's history having a distribution coverage ratio below 1 times. That being said, our current coverage for the current quarter is lower than we would like. Our trailing 12 month coverage ratio remains well above 1 times at 1.37 times. And historically, we do see material improvement in our coverage ratio as we move into the summer driving season. During the Q1 of 2024, the Partnership paid a distribution of $0.525 per unit. Speaker 100:16:16Charles 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 Q1 increased $6,400,000 compared to the 2023 Q1. We had an approximately 7% decrease in operating expenses in our wholesale segment as we have converted locations to company operated and commission locations in the Retail segment. This was offset by a $7,000,000 or 20% increase in operating expenses in our Retail segment. Speaker 100:16:56This increase was primarily due to the increased site count in that Retail segment compared to the prior year due to the site conversions Charles referenced in his comments. During the quarter, we had approximately 22% more company operated locations in our retail segment than last year. Company operated locations are our highest per site expense class of trade and so that site count increase drove the majority of the year over year increase in operating expenses. Additionally, we have selectively added overhead personnel costs in our Retail segment to ensure that we can effectively operate and merchandise our newest company operated locations. Given that following the completion of the Applegreen site transitions in April, we now have added 100 company operated sites to the portfolio from other classes of trade over the past year. Speaker 100:17:51On a same store basis, operating expenses for our company operated locations were up approximately 1% year over year. Our team drove a strong focus on ensuring our company operated locations were staffed efficiently and operating at the right hours, which resulted in an approximately 4% decrease in same store labor hours year over year for the quarter. This strong performance in controlling our store labor hour costs, our largest expense across the organization, coupled with improved performance in shrink and inventory management, allowed us to materially offset cost increases in repairs and maintenance, including environmental maintenance. Our G and A expenses increased $1,100,000 for the quarter year over year, primarily due to higher legal fees and acquisition related costs incurred for the Applegreen transaction. Moving to the next slide, we spent a total of $6,100,000 on capital expenditures during the Q1, with $4,500,000 of that total being growth related capital expenditures. Speaker 100:19:00During this past quarter, growth related capital spending included investments in the forecourt and backcourt of our newly converted company operated locations as well as certain targeted dispenser investments, which are often accompanied with incentives from our fuel suppliers. As of March 31, 2024, our total credit facility balance was $798,300,000 which was a $42,000,000 increase from our 2023 year end balance. The most significant driver of that increase was the approximately $20,000,000 paid to Applegreen during the Q1, inclusive of payments for inventory at converted locations. Additionally, the Q1 is typically a working capital usage quarter for the Partnership and was so again this year. As Charles noted, it was also a lighter asset sale quarter for us, so our capital spending and adjusted EBITDA results for the quarter also contributed to the increase on our revolver balance. Speaker 100:20:07Our credit facility defined leverage ratio was 4.49 times as of March 31, 2024. As we move into the summer months and continue to focus on execution at our sites, we will remain focused on our cash flow generation and managing our leverage ratio at approximately 4 times on a credit facility defined basis. Our cash interest expense was relatively flat over year with our higher credit facility balance being offset by the positive rate savings we experienced from the interest rate swaps we entered into during the 2nd 4th quarters of last year. Our effective interest rate on the Capel credit facility during the Q1 was approximately 5.1%, which is very attractive given today's interest rate environment. Although we did have a series of beneficial interest rate swaps from early 2020 that expired at the end of the Q1, we enter the remainder of 2024 with approximately 50% of our current credit facility balance swapped to a fixed rate of approximately 3.4% blended. Speaker 100:21:18We do anticipate our interest expense increasing during the remainder of the year given the roll off of the swaps from 2020, but our existing interest rate swap portfolio is meaningfully valuable in providing us certainty and savings in today's rate environment. In conclusion, as Charles noted, the partnership had a challenging Q1 of 2024. We remain focused as a team on executing in our base business as well as for the sites that have transitioned between segments over the past year to optimize their performance moving forward. We continue to focus on generating durable and consistent cash flows with a focus on maintaining a strong balance sheet and driving value for our unitholders. With that, we will open it up for questions. Speaker 200:23:03It doesn't appear that we have any questions this morning. Should you have any questions later, please reach out to us and we'll be happy to address them. We thank everyone for joining us this morning. Have a good day. Operator00:23:15Ladies and gentlemen, this concludes today's conference call. Thank you for your participation and you may now disconnect.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallCrossAmerica Partners Q1 202400:00 / 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.comNew “Trump” currency proposed in DCAccording to one of the most connected men in Washington… A surprising new bill was just introduced in Washington. Its purpose: to put Donald Trump’s face on the $100 note. All to celebrate a new “golden age” for America. April 19, 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? 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There are 3 speakers on the call. Operator00:00:00Good morning, ladies and gentlemen, and welcome to the CrossAmerica Partners First Quarter 2024 Earnings Conference Call. At this time, all lines are in listen only mode. Following the presentation, we will conduct a question and answer session. This call is being recorded on Thursday, May 9, 2020 4. I would now like to turn the conference over to Maura Topper, Chief Financial Officer. Operator00:00:40Please go ahead. Speaker 100:00:42Thank you, operator. Good morning, and thank you for joining the CrossAmerica Partners Q1 2024 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 an overview of CrossAmerica's operational performance for the quarter and then I will discuss the financial results. We will then open up the call to questions. Speaker 100:01:08Today'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 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 100:02:12During 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 100:02:41With that, I will now turn the call over to Charles. Speaker 200:02:46Thank you, Maura. Maura and I appreciate all of you joining us this morning as we review our Q1 results. During today's call, I will go through some of the operating highlights for the Q1 2024. I will also provide commentary on the market and other updates similar to what I have done on our prior calls. Laura will then review in more detail our financial results. Speaker 200:03:11Now if you turn to Slide 4, I will briefly review some of our operating results. For the Q1 of 2024, our wholesale segment gross profit declined 14% to $27,000,000 compared to $31,200,000 in the Q1 of 2023. The decrease was driven by a decline in fuel margin, fuel volume and rental income. A significant factor in the overall decline was the conversion of certain lessee dealer sites to company operated and commission agent sites, which are now accounted for in the retail segment. Our wholesale motor fuel gross profit decreased 13% to $14,600,000 in the Q1 of 2024 from $16,700,000 in the Q1 of 2023. Speaker 200:04:02Our fuel margin declined 5% from $0.083 per gallon in the Q1 of 2023 to $0.079 per gallon in the Q1 of 2024. The decrease in our wholesale fuel margin per gallon was primarily driven by the following factors. 1st, our average purchase price of motor fuel per gallon for the Q1 of 2024 was lower than our average purchase price of motor fuel per gallon for the Q1 of 2023, resulting in us receiving a lower dollar amount in terms discounts on certain gallons that we purchased during the quarter. 2nd, we experienced a gradual increase in crude oil prices throughout the Q1 of 2024. Historically, such a steady gradual increase in prices during a period leads to lower wholesale fuel margins per gallon in a year over year comparison due to its impact on our fuel margin and our variable margin priced wholesale contracts. Speaker 200:05:03Also contributing to the margin per gallon decline was a reduction in variable price wholesale fuel volume due to our conversion of certain sites to our retail class of trade. We did benefit this quarter from a reduction in our fuel sourcing cost. However, the benefit of these cost reductions was more than offset by the preceding factors that I just detailed. Our wholesale volume was 184,000,000 gallons for the Q1 of 2024 compared to 201,900,000 gallons in the Q1 of 2023, reflecting a decline of 9%. The decline in volume when compared to the same period in 2023 was primarily due to the conversion of certain lessee dealer sites to our retail class of trade and lower same site volume. Speaker 200:05:53The conversion of sites from wholesale to retail resulted in approximately 8,000,000 gallons of volume shifting segments for the quarter, which was approximately 47% of the total volume decline for the wholesale segment. These gallons are now reflected in our retail segment results. For the quarter, our same store volume in the wholesale segment was down slightly less than 2% year over year. The remaining decline in volume is attributable to loss of independent dealer contracts, which in many cases we chose not to renew. Based on national demand data available to us, our same store wholesale volume performance for the Q1 was better than overall national demand. Speaker 200:06:35In the period since the quarter end, same store volume has been down around 3% year over year. Overall, it was a soft start to the year for volume demand in the industry. Our quarterly wholesale same store volume results, while better on a relative basis than national data, are disappointing. Regarding our wholesale rent, our base rent for the quarter was $12,400,000 compared to the prior year of $13,700,000 a decrease due to the conversion of certain lessee dealer sites to company operated and commission agent sites. These rent dollars are no longer in the form of rent are now effectively in our retail segment results through higher margins at these locations. Speaker 200:07:18They are not lost dollars to the business, but are simply reported now in another segment of our financial results. For the Retail segment, considering the industry environment, our performance was good for the Q1 of 2024, primarily driven by our merchandise growth. The Retail segment generated $54,400,000 in gross profit compared to $50,900,000 for the same period in 2023, a 7% increase. Our merchandise gross profit increased 18% and our merchandise gross profit margin percentage was up approximately 30 basis points when compared to the same period in 2023. Our motor fuel gross profit declined 3%. Speaker 200:08:01On the fuel margin front, our retail fuel margin on a $0.01 per gallon basis decreased 3% year over year as our fuel margin was $0.308 per gallon in the Q1 of 2024 compared to $0.318 per gallon in the Q1 of 2023. Retail fuel margins were pressured this quarter by the generally steady rising price of crude oil during the quarter, which in turn pushed our fuel costs higher and adversely impacted retail street fuel pricing volatility. For volume on a same store basis, our retail volume declined 3% for the quarter year over year. On a relative basis to national demand data, our same store retail volume outperformed. However, on an absolute basis, it is a disappointing result and reflects the overall soft demand that we and the industry have experienced to start the year. Speaker 200:08:55In the period since the quarter end, retail same store volume has remained down at approximately 3% year over year, and retail fuel margins have continued to be roughly in line with our Q1 results. For inside sales on a same site basis, our inside sales were up slightly relative to last year for the Q1. Inside sales, excluding cigarettes, were up approximately 2% year over year on a same store basis for the quarter. The sales performance was primarily driven by the categories of packaged beverages and deli. On the store merchandise margin front, our merchandise gross profit increased 18% to $21,400,000 driven by our increased sales from the higher store count and improvement in our store merchandise gross margin percentage. Speaker 200:09:45The store merchandise margin improvement was due to our continued efforts and focus on our margins. In the period since the quarter end, same store sales have been flat to slightly down from the prior year, reflecting the ongoing soft demand environment. In our retail segment, if you look at our company operated site count, we are up 75 company operated retail sites from the prior year and up 47 sites relative to last quarter, Q4 of 2023. The increase in company operated site count relative to the Q4 was primarily driven by our conversion of the Applegreen lease locations to company operated retail sites. As we previously announced and also noted in our press release, we signed an agreement in January to terminate the lease and company operate 59 sites that we previously leased to Applegreen. Speaker 200:10:39Of these 59 locations, 31 locations were converted during the Q1 of 2024 and the remaining 28 locations converted in April 2024, so that as of today, all the locations are CrossAmerica company operated retail locations. We are pleased to welcome all the team members at these locations to the CrossAmerica team and thank everyone involved for their hard work in successfully executing this transaction. We expect this transaction to be immediately accretive to our retail segment and overall results. Our commission agent site count increased by 9 sites relative to the Q1 of 2023. In total, we have increased our overall retail site count by 85 sites as of today's date relative to the end of Q4. Speaker 200:11:29Based on those numbers, you can see that we were extremely active during quarter with site conversions and executing on our strategy to increase our exposure to retail fuel margins and the retail business overall. During the quarter, we did not divest any properties. Subsequent to the quarter end, we have divested 2 properties for $2,500,000 in proceeds. While the number of closed transactions is low year to date, we have been busy building our pipeline of divestitures and expect the pace and volume of transactions to increase materially for the remainder of the year. Overall, it was a challenging start to the year as our Q1 results reflect. Speaker 200:12:11The Q1 of the year is typically our weakest quarter of the year and this Q1 was a weak Q1 compared to prior 1st quarters. While our volume numbers compare favorably to national volume data, on an absolute basis, volume was below what we expect to achieve. In our retail sites, our store sales, while again better on a relative basis compared to nationally available data, were also below our expectations. Despite the soft financial results for the quarter, there were still positive developments in our business. One of the most significant was our conversion of the Applegreen sites to company operated retail locations. Speaker 200:12:51We were also able to convert 20 other locations this quarter to our retail class of trade, either as company operated sites or as commission retail locations. These conversions should generate better fuel volume and increased profitability at these sites going forward. Mara will touch on in her comments on some successes with expense management that we had during the quarter as well. So progress was made during the quarter, even if not evident in our financial results. And the best thing about the Q1 is that it leads into the spring summer, our peak months of the year. Speaker 200:13:27With that, I will turn it over to Maura for a more detailed financial review. Speaker 100:13:35Thank 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 $17,500,000 for the Q1 of 2024 compared to a net loss of $1,000,000 in the Q1 of 2023. This loss was primarily driven by a $15,900,000 loss on the lease termination with Applegreen and a decline in our year over year adjusted EBITDA. Regarding the lease termination charge for the Applegreen transaction, GAAP requires us to record substantially all of the price paid to Applegreen for the transaction, excluding amounts for inventory and equipment as an income statement expense as opposed to a balance sheet purchase, which drove the lease termination expense in the quarter. Speaker 100:14:24Adjusted EBITDA was $23,600,000 for the Q1 of 2024, a decline of $8,200,000 from adjusted EBITDA of $31,700,000 for the Q1 of 2023. Our distributable cash flow for the Q1 of 2024 was $11,700,000 compared to $19,100,000 for the Q1 of 2023. The declines in adjusted EBITDA and distributable cash flow were primarily due to operating income decreases in both our wholesale and retail segments, driven by the challenging fuel margin environment during the quarter and the additional operating expenses incurred primarily as a result of our higher company operated store count. Our distribution coverage for the current quarter was 0.59 times compared to 0.96 times for the Q1 of 2023. Our distribution coverage for the trailing 12 months ended March 31, 2024 was 1.37 times compared to 1.7 times for the same period ended March 31, 2023. Speaker 100:15:37The Q1 historically is our most challenging of the year with 9 out of the 12 first quarters in the Partnership's history having a distribution coverage ratio below 1 times. That being said, our current coverage for the current quarter is lower than we would like. Our trailing 12 month coverage ratio remains well above 1 times at 1.37 times. And historically, we do see material improvement in our coverage ratio as we move into the summer driving season. During the Q1 of 2024, the Partnership paid a distribution of $0.525 per unit. Speaker 100:16:16Charles 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 Q1 increased $6,400,000 compared to the 2023 Q1. We had an approximately 7% decrease in operating expenses in our wholesale segment as we have converted locations to company operated and commission locations in the Retail segment. This was offset by a $7,000,000 or 20% increase in operating expenses in our Retail segment. Speaker 100:16:56This increase was primarily due to the increased site count in that Retail segment compared to the prior year due to the site conversions Charles referenced in his comments. During the quarter, we had approximately 22% more company operated locations in our retail segment than last year. Company operated locations are our highest per site expense class of trade and so that site count increase drove the majority of the year over year increase in operating expenses. Additionally, we have selectively added overhead personnel costs in our Retail segment to ensure that we can effectively operate and merchandise our newest company operated locations. Given that following the completion of the Applegreen site transitions in April, we now have added 100 company operated sites to the portfolio from other classes of trade over the past year. Speaker 100:17:51On a same store basis, operating expenses for our company operated locations were up approximately 1% year over year. Our team drove a strong focus on ensuring our company operated locations were staffed efficiently and operating at the right hours, which resulted in an approximately 4% decrease in same store labor hours year over year for the quarter. This strong performance in controlling our store labor hour costs, our largest expense across the organization, coupled with improved performance in shrink and inventory management, allowed us to materially offset cost increases in repairs and maintenance, including environmental maintenance. Our G and A expenses increased $1,100,000 for the quarter year over year, primarily due to higher legal fees and acquisition related costs incurred for the Applegreen transaction. Moving to the next slide, we spent a total of $6,100,000 on capital expenditures during the Q1, with $4,500,000 of that total being growth related capital expenditures. Speaker 100:19:00During this past quarter, growth related capital spending included investments in the forecourt and backcourt of our newly converted company operated locations as well as certain targeted dispenser investments, which are often accompanied with incentives from our fuel suppliers. As of March 31, 2024, our total credit facility balance was $798,300,000 which was a $42,000,000 increase from our 2023 year end balance. The most significant driver of that increase was the approximately $20,000,000 paid to Applegreen during the Q1, inclusive of payments for inventory at converted locations. Additionally, the Q1 is typically a working capital usage quarter for the Partnership and was so again this year. As Charles noted, it was also a lighter asset sale quarter for us, so our capital spending and adjusted EBITDA results for the quarter also contributed to the increase on our revolver balance. Speaker 100:20:07Our credit facility defined leverage ratio was 4.49 times as of March 31, 2024. As we move into the summer months and continue to focus on execution at our sites, we will remain focused on our cash flow generation and managing our leverage ratio at approximately 4 times on a credit facility defined basis. Our cash interest expense was relatively flat over year with our higher credit facility balance being offset by the positive rate savings we experienced from the interest rate swaps we entered into during the 2nd 4th quarters of last year. Our effective interest rate on the Capel credit facility during the Q1 was approximately 5.1%, which is very attractive given today's interest rate environment. Although we did have a series of beneficial interest rate swaps from early 2020 that expired at the end of the Q1, we enter the remainder of 2024 with approximately 50% of our current credit facility balance swapped to a fixed rate of approximately 3.4% blended. Speaker 100:21:18We do anticipate our interest expense increasing during the remainder of the year given the roll off of the swaps from 2020, but our existing interest rate swap portfolio is meaningfully valuable in providing us certainty and savings in today's rate environment. In conclusion, as Charles noted, the partnership had a challenging Q1 of 2024. We remain focused as a team on executing in our base business as well as for the sites that have transitioned between segments over the past year to optimize their performance moving forward. We continue to focus on generating durable and consistent cash flows with a focus on maintaining a strong balance sheet and driving value for our unitholders. With that, we will open it up for questions. Speaker 200:23:03It doesn't appear that we have any questions this morning. Should you have any questions later, please reach out to us and we'll be happy to address them. We thank everyone for joining us this morning. Have a good day. Operator00:23:15Ladies and gentlemen, this concludes today's conference call. Thank you for your participation and you may now disconnect.Read morePowered by