SUSSER HOLDINGS CORPORATION 
By CORPUS CHRISTI, Texas, Feb. 26, 2014 /PRNewswire/ -- Susser Holdings Corporation (NYSE: SUSS) today reported financial and operating results for the three- and 12-month periods ended December 29, 2013. Results detailed below include the results of Susser Petroleum Partners LP (NYSE: SUSP) unless otherwise noted.
Same-store merchandise sales increased 2.4 percent in the fourth quarter of 2013, versus growth of 5.8 percent in the same quarter of 2012. Average retail gallons sold per store increased 7.8 percent compared with growth of 3.1 percent in the fourth quarter of 2012. Retail net merchandise margin increased to 34.4 percent, up from 34.1 percent in the prior-year period.
Retail fuel margin before credit card expense averaged 14.6 cents per gallon, versus 21.1 cents per gallon in the fourth quarter of 2012. That compares to an average fourth quarter retail fuel margin of 14.4 cents per gallon over the previous five years, calculated as if the 3-cent-per-gallon mark-up charged by Susser Petroleum Partners had been in place for the entire period.
Net income attributable to Susser Holdings was $5.9 million, or $0.27 per diluted share, versus net income of $10.6 million, or $0.49 per diluted share in the fourth quarter of 2012.
Adjusted EBITDA((1)) totaled $37.3 million, down 18.0 percent from a year earlier. Consolidated gross profit totaled $156.9 million, roughly flat compared with the fourth quarter of 2012. These results primarily reflect growth in merchandise and gallons sold, offset by lower retail fuel margins.
Fourth quarter consolidated revenues totaled $1.5 billion, up 9.2 percent from a year earlier. This increase was the result of an 8.9 percent increase in merchandise sales, a 5.4 percent increase in retail fuel revenues and a 16.1 percent increase in wholesale fuel revenues from third parties. The positive revenue impact of higher fuel volumes sold was partially offset by lower per-gallon selling prices, particularly in the retail segment.
"During 2013 we achieved several important milestones, including our 25(th) consecutive year of positive same-store retail merchandise sales growth. We announced two tuck-in acquisitions that will contribute to the growth of both Susser Holdings and Susser Petroleum Partners, and the opening of a record 29 new large-format Stripes(®) locations in Texas," said Sam L. Susser, Chairman and Chief Executive Officer.
"We are very pleased with our most recent acquisition, the Sac-N-Pac(TM) retail convenience stores serving communities in the fast-growing I-35 corridor in South Central Texas and a related wholesale fuel supply business. We have completed the integration of those businesses into our organization and our back office systems, and they are performing well, due to the quality of the real estate and the 'can do' attitude of the Sac-N-Pac and Stripes team members who drove the smooth transition. This transaction is expected to be accretive to both the Company and the Partnership.
"We feel very confident about the long-term growth potential in our key markets in Central Texas, where job growth and major capital investments are creating strong opportunities to expand both our retail and wholesale businesses," Susser added.
New Convenience Store and Wholesale Business Update
Susser Holdings opened nine new large-format Stripes convenience stores during the fourth quarter. Three smaller stores were closed, a fourth was razed and is being rebuilt on the existing location, and a fifth store was converted to a wholesale dealer location during the fourth quarter. For the full year, the Company opened a record 29 new stores and closed, rebuilt or converted eight stores. At year-end the Company operated a total of 580 Stripes stores, of which 376 include a restaurant. 13 new stores are currently under construction. In addition to the purchase of the 47 Sac-N-Pac locations, the Company expects to open a total of 27 to 33 Stripes stores this year and continues to acquire additional land for future store development.
Eight new contracted sites were added in the wholesale segment in the fourth quarter, and four were discontinued for a total of 591 contracted branded sites as of December 31, 2013. This included 99 consignment locations and 492 independent branded dealer contracts. Susser added a total of 32 new dealer sites in 2013 and discontinued 20. In 2014, in addition to the 20 new dealer sites acquired in the Sac-N-Pac transaction, Susser currently expects to add 28 to 45 new wholesale branded dealers and consignment sites.
As previously reported, Susser Holdings completed the acquisition in late January of the convenience store assets and fuel distribution contracts of Sac-N-Pac Stores, Inc. and 3W Warren Fuels, Ltd. 3W Warren Fuels supplied approximately 65 million gallons of motor fuel annually to the 47 Sac-N-Pac locations and to approximately 20 independent dealer locations. The total purchase price was approximately $88 million plus inventories. Susser plans to initially operate all of the 47 stores under the Sac-N-Pac brand. Over the next six to eighteen months, Susser may convert some of the sites to the Stripes brand, may add the Laredo Taco Company brand to certain locations or may elect to convert some sites to the Company's wholesale dealer network.
Financing Update
Susser Holdings and Susser Petroleum Partners completed a sale leaseback transaction for three new Stripes locations during the fourth quarter for a total cost of $11.9 million. In total, Susser completed sale leaseback transactions for 25 stores in 2013. So far in the first quarter of 2014, Susser has completed sale leasebacks for five additional stores at a cost of $19.5 million. Since the initial public offering of units in Susser Petroleum Partners was completed in September 2012, Susser has completed sale leaseback transactions for a total of 38 newly built stores at a cumulative cost of $152.7 million.
Total consolidated debt at year-end was $375.9 million. In December 2013, SUSP increased its revolving credit facility from $250 million to $400 million while retaining the ability to increase it by another $100 million. Combined availability on our revolving credit facilities, after borrowings and letter of credit commitments, was $543.1 million.
Fourth Quarter Financial and Operating Highlights
Merchandise - Merchandise sales totaled $262.2 million in the fourth quarter of 2013, up 8.9 percent from a year ago. Approximately $5.7 million of the increase came from stores that have been open a year or more, with the remainder from 29 stores that were opened during the last four quarters. Same-store merchandise sales rose 2.4 percent, versus an increase of 5.8 percent in the fourth quarter of 2012. Sales from food service and snacks were the biggest contributors of the sales growth.
Net merchandise margin as a percentage of sales was 34.4 percent, up from 34.1 percent a year ago. Merchandise gross profit was $90.2 million, an increase of 9.7 percent from the fourth quarter of 2012. Gross profit growth was led by $6.1 million contribution from new stores and by same-store increases from food service and snacks.
Retail Fuel - Retail fuel volumes increased 12.3 percent from a year earlier to 237.3 million gallons. Average gallons sold per store were 7.8 percent higher than a year ago, at approximately 32,100 gallons per week. Retail fuel revenues totaled $756.8 million, up 5.4 percent from the fourth quarter of the previous year, reflecting the increase in gallons sold, partly offset by a 21-cent-per-gallon decline in the average selling price of motor fuel versus the fourth quarter of 2012.
Retail fuel gross margin averaged 14.6 cents per gallon, versus 21.1 cents per gallon a year earlier. After deducting credit card expense, the net fuel margin was 9.3 cents per gallon for the fourth quarter, compared with 15.6 cents per gallon in the prior-year period. Retail fuel gross profit was $34.7 million, down 22.3 percent year-over-year as a result of the lower margin per gallon, partly offset by higher volumes sold.
Wholesale Fuel - Susser's wholesale segment includes all of SUSP's operations plus the consignment sales and transportation business that were not contributed to SUSP in the 2012 IPO. Wholesale fuel volumes sold to third parties - which includes all gallons except those distributed to Susser's retail stores - were up 18.2 percent from the fourth quarter of 2012 to 177.2 million gallons. Wholesale fuel revenues increased 16.1 percent year-over-year to $505.0 million. This increase reflects the impact of the significantly higher volumes sold, partly offset by a 5-cent-per-gallon sales price reduction compared with the fourth quarter of 2012.
Wholesale fuel gross margin from third parties was 6.3 cents per gallon, the same as the year-earlier quarter. Wholesale fuel gross profit, including sales to Stripes, increased by 15.7 percent year-over-year to $18.3 million. The gross profit increase was primarily the result of the increase in gallons sold, including the impact of the Gainesville Fuel acquisition for a full quarter.
Full Year 2013 Financial and Operating Highlights
For the full year 2013, Susser's same-store merchandise sales rose 3.0 percent. Consolidated revenues increased 5.8 percent to $6.2 billion, driven by increases in merchandise sales and retail and wholesale fuel revenues. Merchandise sales totaled $1.1 billion, an increase of 9.2 percent from 2012. Merchandise margin was 33.9 percent, unchanged from the prior year.
Retail fuel margin was 16.9 cents per gallon for the full year, versus 21.8 cents in 2012. On a comparable basis adjusting for the 3-cent-per-gallon mark-up that Stripes now pays to SUSP, average retail margin for 2012 was 19.6 cents and for the previous five years was 16.7 cents per gallon. After deducting credit card expense, 2013 net fuel margin was 11.4 cents per gallon, compared with 16.3 cents per gallon in 2012. Wholesale fuel margin was 6.6 cents per gallon, versus 6.2 cents per gallon in the prior-year period.
Adjusted EBITDA(1) for the full year totaled $169.0 million, down 7.6 percent from 2012. Gross profit totaled $644.2 million, an increase of 5.4 percent, due to approximately $32 million contribution from new stores opened in the prior 12 months and the impact of increased merchandise and fuel volumes at existing stores and wholesale third-party sales, partially offset by lower retail fuel margins which reduced gross profit by approximately $25 million.
Excluding the impact of a $16.7 million after-tax charge on early extinguishment of debt related to the redemption of our 8.50 percent senior unsecured notes, in May 2013 and a $3.6 million deferred tax charge related to the Gainesville Fuel acquisition and subsequent contribution to SUSP, full year 2013 adjusted net income was $34.7 million, or $1.60 per diluted share. On a comparable basis, excluding the impact of a non-cash deferred tax charge of $3.6 million related to the SUSP IPO in the third quarter of 2012, adjusted net income for the full year 2012 was $50.3 million, or $2.36 per diluted share.
Reported net income for the full year 2013 was $14.3 million, or $0.66 per diluted share, versus reported net income of $46.7 million, or $2.19 per diluted share in 2012. A reconciliation of reported to adjusted earnings is provided later in this news release.
2014 Guidance
The Company is providing the following initial 2014 full-year guidance, which includes the recent Sac-N-Pac acquisition unless otherwise noted:
FY 2014 FY 2013
Guidance Actual
-------- ------
Merchandise Same-Store
Sales Growth 2.5%-5.0% 3.0%
Merchandise Margin, Net of
Shortages 33.25%-34.25% 33.9%
Retail Average Per-Store
Gallons Growth 0.0%-3.0% 5.8%
Fuel Gross Profit Margins
(cents /gallon):
Margin on Retail Gallons
Sold (a) 15.0-18.0 16.9
Margin on Wholesale
Gallons Sold to Third
Parties (b) 5.5-7.0 6.6
Margin on Wholesale
Gallons Sold to Retail
Segment (c) approx 3 3.0
Rent Expense (millions)
(f) $47-$49 $47.5
Depreciation, Amortization
& Accretion Expense
(millions) $70-$80 $61.4
Interest Expense
(millions) (d) $13-$16 $21.5
New Retail Stores (e) 27-33 29
New Wholesale Dealer Sites
(e) 28-45 32
Gross Capital Spending
(millions) (f) $300-$350 $212.4
Effective Tax Rate (g) 27%-31% 26.8%
(a) We report retail fuel margin
before deducting credit
card costs, which were
approximately 5.3 cents per
gallon for the fourth
quarter and 5.5 cents per
gallon for the full year
2013. The Company has
provided quarterly fuel
margin history on its
website. The average retail
selling price per gallon of
fuel was $3.19 for the
fourth quarter and $3.39
for the full year 2013.
(b) Wholesale segment margin on
third-party gallons
includes SUSP operations
and gallons sold at
consignment locations
retained by SUSS, but
excludes gallons sold to
the retail division. This
metric remains the same as
it was prior to the SUSP
initial public offering.
(c) Wholesale segment margin to
Stripes retail stores
reflects the mark-up
charged by SUSP effective
September 25, 2012.
(d) 2013 interest expense
excludes $26.2 million
related to redemption of
the $425 million 8.5%
senior unsecured notes in
May 2013.
(e) Numbers for both years do
not reflect Sac-N-Pac
acquisition, or existing
retail or wholesale store
closures, which are
typically lower volume
locations than new sites.
During 2013 the Company
closed eight retail stores
and discontinued 20
wholesale sites.
(f) Gross capital expenditures
include announced
acquisitions and purchase
of intangibles. The Company
does not provide guidance
on potential acquisitions.
The impact of sales of
stores by SUSS to SUSP
under sale leaseback
agreements does not impact
Susser's consolidated
capital expenditures or
rent expense.
(g) 2013 effective tax rate
excludes non-cash deferred
tax charge related to the
acquisition of Gainesville
Fuel and contribution to
SUSP.
(1) Adjusted EBITDA is a non-
GAAP financial measure of
performance that has
limitations and should not
be considered as a
substitute for net income.
Please refer to the
discussion and tables under
"Key Operating Metrics"
later in this news release
for a discussion of our use
of Adjusted EBITDA and
Adjusted EBITDAR, and a
reconciliation to net
income (loss) attributable
to Susser Holdings
Corporation for the periods
presented.
Fourth Quarter Earnings Conference Call
Susser's management team will hold a conference call today at 10:00 a.m. ET (9:00 a.m. CT) to discuss fourth quarter and full year 2013 results for both Susser Holdings Corporation and Susser Petroleum Partners LP. To participate in the call, dial 480-629-9818 10 minutes early and ask for the Susser conference call. The call will also be accessible live and for later replay via webcast in the Investor Relations section of Susser Holdings' web site at www.susser.com and Susser Petroleum Partners' web site at www.susserpetroleumpartners.com under Events and Presentations. A telephone replay will be available through March 5 by calling 303-590-3030 and using the access code 4665734#.
Susser Holdings Corporation is a third-generation family led business based in Corpus Christi, Texas that operates 627 convenience stores in Texas, New Mexico and Oklahoma, with 580 under the Stripes® banner and 47 under the Sac-N-Pac(TM) banner. Restaurant service is available in approximately 400 of its stores, primarily under the proprietary Laredo Taco Company® brand. Susser Holdings also is majority owner and owns the general partner of Susser Petroleum Partners LP, which distributes approximately 1.6 billion gallons of motor fuel annually to Stripes® stores, independently operated consignment locations, convenience stores and retail fuel outlets operated by independent operators and other commercial customers in Texas, New Mexico, Oklahoma and Louisiana.
Forward-Looking Statements
This news release contains "forward-looking statements" which may describe Susser's objectives, expected results of operations, targets, plans, strategies, costs, anticipated capital expenditures, potential acquisitions, new store openings and/or new dealer locations. These statements are based on current plans and expectations and involve a number of risks and uncertainties that could cause actual results and events to vary materially, including but not limited to: competitive pressures from convenience stores, gasoline stations, other non-traditional retailers located in our markets and other wholesale fuel distributors; dangers inherent in storing and transporting motor fuel; pending or future consumer or other litigation or adverse publicity concerning food quality, food safety or other health concerns related to our restaurant facilities; inability to build or acquire and successfully integrate new stores; volatility in crude oil and wholesale petroleum costs; increasing consumer preferences for alternative motor fuels, or improvements in fuel efficiency; general economic, financial and political conditions; our dependence on our subsidiaries for cash flow generation, including SUSP, and our exposure to the business risks of SUSP by virtue of our controlling ownership interest; operational limitations imposed by our contractual arrangements with SUSP; our ability to comply with federal and state regulations including those related to alcohol, tobacco and environmental matters; wholesale cost increases of tobacco products or future legislation or campaigns to discourage smoking; costs associated with employee healthcare requirements; compliance with, or changes in, tax laws-including those impacting the tax treatment of SUSP; dependence on two principal suppliers for merchandise; dependence on suppliers for credit terms; seasonality; dependence on senior management and the ability to attract qualified employees; acts of war and terrorism; dependence on our information technology systems; severe weather; cross-border risks associated with the concentration of our stores in markets bordering Mexico; impairment of goodwill or indefinite lived assets; and other unforeseen factors.
For a full discussion of these and other risks and uncertainties, refer to the "Risk Factors" section of the Company's most recently filed annual report on Form 10-K and subsequent quarterly filings. These forward-looking statements are based on and include our estimates as of the date hereof. Subsequent events and market developments could cause our estimates to change. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if new information becomes available, except as may be required by applicable law.
Contacts: Susser Holdings Corporation
Mary Sullivan, Chief Financial Officer
(361) 884-2463, msullivan@susser.com
Dennard-Lascar Associates, LLC
Anne Pearson, Senior Vice President
(210) 408-6321, apearson@dennardlascar.com
Financial statements follow
Susser Holdings Corporation
Consolidated Statements of Operations and Comprehensive Income
Three Months Ended Twelve Months Ended
------------------ -------------------
December 30, December 29, December 30, December 29,
2012 2013 2012 2013
---- ---- ---- ----
(dollars in thousands, except shares and per share
amounts)
Revenues:
Merchandise
sales $240,838 $262,207 $976,452 $1,066,022
Motor fuel
sales 1,152,929 1,261,793 4,842,715 5,092,731
Other income 15,466 14,283 53,625 55,062
------ ------ ------ ------
Total revenues 1,409,233 1,538,283 5,872,792 6,213,815
Cost of sales:
Merchandise 158,654 172,012 645,500 704,668
Motor fuel 1,092,454 1,208,000 4,611,075 4,860,678
Other 1,691 1,375 4,823 4,306
----- ----- ----- -----
Total cost of
sales 1,252,799 1,381,387 5,261,398 5,569,652
--------- --------- --------- ---------
Gross profit 156,434 156,896 611,394 644,163
Operating
expenses:
Personnel 46,135 52,354 180,042 208,018
General and
administrative 12,752 14,970 48,796 54,722
Other operating 40,320 42,896 157,589 172,667
Rent 11,739 11,802 46,407 47,468
Loss on
disposal of
assets and
impairment
charge 205 709 694 2,216
Depreciation,
amortization
and accretion 13,135 16,560 51,434 61,368
------ ------ ------ ------
Total operating
expenses 124,286 139,291 484,962 546,459
------- ------- ------- -------
Income from
operations 32,148 17,605 126,432 97,704
Other income
(expense):
Interest
expense, net (9,939) (2,521) (41,019) (47,673)
Other
miscellaneous (141) 173 (471) (287)
---- --- ---- ----
Total other
expense, net (10,080) (2,348) (41,490) (47,960)
------- ------ ------- -------
Income before
income taxes 22,068 15,257 84,942 49,744
Income tax
expense (7,196) (4,589) (33,645) (16,940)
------ ------ ------- -------
Net income and
comprehensive
income 14,872 10,668 51,297 32,804
------ ------ ------ ------
Less: Net
income and
comprehensive
income
attributable
to
noncontrolling
interest 4,283 4,742 4,572 18,473
----- ----- ----- ------
Net income and
comprehensive
income
attributable
to Susser
Holdings
Corporation $10,589 $5,926 $46,725 $14,331
======= ====== ======= =======
Net income per
share
attributable
to Susser
Holdings
Corporation:
Basic $0.51 $0.28 $2.25 $0.68
Diluted $0.49 $0.27 $2.19 $0.66
Weighted
average shares
outstanding:
Basic 20,903,840 21,245,452 20,727,985 21,156,867
Diluted 21,404,906 21,693,082 21,314,738 21,656,782
Susser Holdings Corporation
Consolidated Balance Sheets
December 30, December 29,
2012 2013
---- ----
(in thousands except shares)
Assets
Current assets:
Cash and cash
equivalents $286,232 $22,461
Accounts
receivable, net
of allowance
for doubtful
accounts of
$707 at
December 31,
2012, and $480
at December 29,
2013 105,874 139,146
Inventories, net 115,048 126,521
Other current
assets 6,678 7,704
----- -----
Total current
assets 513,832 295,832
Property and
equipment, net 602,151 736,860
Other assets:
Marketable
securities 148,264 25,952
Goodwill 244,398 254,285
Intangible
assets, net 45,764 41,984
Other noncurrent
assets 15,381 19,692
------ ------
Total assets $1,569,790 $1,374,605
========== ==========
Liabilities and
shareholders'
equity
Current
liabilities:
Accounts payable $171,545 $189,587
Accrued expenses
and other
current
liabilities 63,834 64,571
Current
maturities of
long-term debt 36 535
--- ---
Total current
liabilities 235,415 254,693
Revolving line
of credit 35,590 345,460
Long-term debt 571,649 29,874
Deferred tax
liability,
long-term
portion 80,992 77,119
Other noncurrent
liabilities 45,445 41,949
------ ------
Total
liabilities 969,091 749,095
------- -------
Commitments and
contingencies:
Shareholders'
equity:
Susser Holdings
Corporation
shareholders'
equity:
Common stock,
$.01 par value; 21,634,618
125,000,000 issued and
shares 21,439,944
authorized; outstanding as
21,619,700 of December 29,
issued and 2013
21,229,499
outstanding as
of December 30,
2012; 212 214
Additional paid-
in capital 276,430 285,376
Treasury stock,
common shares,
at cost;
390,201 as of
December 30,
2012; and
194,674 as of
December 29,
2013 (8,068) (5,378)
Retained
earnings 120,924 135,255
-------
Total Susser
Holdings
Corporation
shareholders'
equity 389,498 415,467
Noncontrolling
interest 211,201 210,043
------- -------
Total
shareholders'
equity 600,699 625,510
------- -------
Total
liabilities and
shareholders'
equity $1,569,790 $1,374,605
========== ==========
Key Operating Metrics
The following table sets forth, for the periods indicated, information concerning key measures we rely on to gauge our operating performance:
Three Months Ended Twelve Months Ended
------------------ -------------------
December 30, December 29, December 30, December 29,
2012 2013 2012 2013
---- ---- ---- ----
(dollars in thousands, except per gallon items)
Revenue:
Merchandise sales $240,838 $262,207 $976,452 $1,066,022
Motor fuel - retail 718,112 756,797 2,995,840 3,171,066
Motor fuel - wholesale to
third parties (3) 434,817 504,996 1,846,875 1,921,665
Other 15,466 14,283 53,625 55,062
------ ------ ------ ------
Total revenue (3) $1,409,233 $1,538,283 $5,872,792 $6,213,815
Gross Profit:
Merchandise $82,184 $90,195 $330,952 $361,354
Motor fuel - retail (1) 44,627 34,664 186,041 158,370
Motor fuel - wholesale to
third parties (2) 9,459 11,135 37,091 42,582
Motor fuel - wholesale to
Stripes (2) 6,389 7,200 6,472 27,948
Other, including
intercompany eliminations 13,775 13,702 50,838 53,909
Total gross profit $156,434 $156,896 $611,394 $644,163
Adjusted EBITDA (4):
Retail $33,239 $25,195 $154,205 $119,165
Wholesale 14,021 16,391 35,833 62,482
Other (1,771) (4,270) (7,141) (12,599)
------ ------ ------ -------
Total Adjusted EBITDA $45,489 $37,316 $182,897 $169,048
Retail merchandise margin 34.1% 34.4% 33.9% 33.9%
Merchandise same store
sales growth 5.8% 2.4% 6.6% 3.0%
Average per retail store
per week:
Merchandise sales $33.6 $35.1 $34.5 $36.2
Motor fuel gallons sold 29.8 32.1 30.3 32.1
Motor fuel gallons sold:
Retail 211,258 237,293 853,163 936,232
Wholesale - third party 149,935 177,164 594,909 642,098
Average retail price of
motor fuel per gallon $3.40 $3.19 $3.51 $3.39
Motor fuel gross profit
cents per gallon:
Retail (1) 21.1 ¢ 14.6 ¢ 21.8 ¢ 16.9 ¢
Wholesale - third party (2) 6.3 ¢ 6.3 ¢ 6.2 ¢ 6.6 ¢
Retail credit card cents
per gallon 5.5 ¢ 5.3 ¢ 5.5 ¢ 5.5 ¢
(1) Effective September 25, 2012,
the retail fuel gross profit
reflects a reduction of
approximately three cents
per gallon as SUSP began
charging a profit mark-up
on gallons sold to our
retail segment. Prior to
this date, no gross profit
mark-up was charged by the
wholesale segment to the
retail segment. The retail
fuel margins reported for
full year 2012 and 2013 have
been reduced by 0.75 and 3.0
cents per gallon,
respectively, for this
profit margin.
(2) The wholesale margin from
third parties excludes sales
and gross profit to the
retail segment. Wholesale
margin to Stripes reflects
the markup of approximately
3 cents per gallon beginning
September 25, 2012. Prior
to this date, no profit
margin was recognized in the
wholesale segment on sales
to Stripes stores.
(3) In 2013, the Company revised
its presentation of fuel
taxes on motor fuel sales on
its consignment locations to
present such fuel taxes
gross in motor fuel sales.
Prior years' motor fuel
sales have been adjusted to
reflect this revision.
Reconciliations of Non-GAAP Measures to GAAP Measures
We define EBITDA as net income (loss) attributable to Susser Holdings Corporation before net interest expense, income taxes, net income attributable to noncontrolling interest, and depreciation, amortization and accretion. Adjusted EBITDA further adjusts EBITDA by excluding non-cash stock-based compensation expense and certain other operating expenses that are reflected in our net income that we do not believe are indicative of our ongoing core operations, such as significant non-recurring transaction expenses and the gain or loss on disposal of assets and impairment charges. Adjusted EBITDAR adds back rent to Adjusted EBITDA. In addition, those expenses that we have excluded from our presentation of Adjusted EBITDA and Adjusted EBITDAR are also excluded in measuring our covenants under our debt agreement and indentures.
We believe that EBITDA, Adjusted EBITDA and Adjusted EBITDAR are useful to investors in evaluating our operating performance because:
-- securities analysts and other interested parties use such calculations
as a measure of financial performance and debt service capabilities;
-- they facilitate management's ability to measure the operating
performance of our business on a consistent basis by excluding the
impact of items not directly resulting from our retail convenience
stores and wholesale motor fuel distribution operations;
-- they are used by our management for internal planning purposes,
including aspects of our consolidated operating budget, capital
expenditures, as well as for segment and individual site operating
targets; and
-- they are used by our Board and management for determining certain
management compensation targets and thresholds.
The addition of net income attributable to noncontrolling interests means that our presentation of EBITDA, Adjusted EBITDA and Adjusted EBITDAR includes 100% of the operations of SUSP, even though our economic interest in SUSP, following its September 2012 initial public offering, is limited to our ownership of a 50.2% limited partner interest in SUSP and all SUSP's incentive distribution rights (which entitle us to an increasing percentage of distributions once SUSP distributes its minimum quarterly distribution). We believe this presentation approach provides investors a better understanding of the performance of our core businesses over time than one which excludes a portion of the EBITDA, Adjusted EBITDA or Adjusted EBITDAR contributed by the operations of SUSP, over which we retain exclusive control. This presentation approach is also consistent with that used for management incentive compensation targets and with the financial covenants in our outstanding borrowing agreements. However, investors utilizing these non-GAAP measures for valuation purposes, or otherwise in making an investment decision in Susser Holdings Corporation, should take into account the 49.8% ownership of SUSP by the public when considering the contribution by SUSP to Susser Holdings Corporation's consolidated EBITDA, Adjusted EBITDA and Adjusted EBITDAR under this presentation format.
EBITDA, Adjusted EBITDA and Adjusted EBITDAR are not recognized terms under GAAP and do not purport to be alternatives to net income as measures of operating performance. EBITDA, Adjusted EBITDA and Adjusted EBITDAR have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. Some of these limitations include:
-- they do not reflect our cash expenditures, or future requirements, for
capital expenditures or contractual commitments;
-- they do not reflect changes in, or cash requirements for, working
capital;
-- they do not reflect significant interest expense, or the cash
requirements necessary to service interest or principal payments on our
existing revolving credit facility or existing notes;
-- they do not reflect payments made or future requirements for income
taxes;
-- although depreciation and amortization are non-cash charges, the assets
being depreciated and amortized will often have to be replaced in the
future, and EBITDA, Adjusted EBITDA and Adjusted EBITDAR do not reflect
cash requirements for such replacements, and;
-- because not all companies use identical calculations, our presentation
of EBITDA, Adjusted EBITDA and Adjusted EBITDAR may not be comparable to
similarly titles measures of other companies.
The following table presents a reconciliation of net income attributable to Susser Holdings Corporation to EBITDA, Adjusted EBITDA and Adjusted EBITDAR:
Three Months Ended Twelve Months Ended
------------------ -------------------
December 30, December 29, December 30, December 29,
2012 2013 2012 2013
------------- ------------- ------------- -------------
Net income
attributable
to Susser
Holdings
Corporation $10,589 $5,926 $46,725 $14,331
Net income
attributable
to
noncontrolling
interest 4,283 4,742 4,572 18,473
Depreciation,
amortization
and
accretion 13,135 16,560 51,434 61,368
Interest
expense,
net 9,939 2,521 41,019 47,673
Income tax
expense 7,196 4,589 33,645 16,940
----- ----- ------ ------
EBITDA $45,142 $34,338 $177,395 $158,785
Non-cash
stock-
based
compensation 1 2,442 4,337 7,760
Loss on
disposal of
assets and
impairment
charge 205 709 694 2,216
Other
miscellaneous
expense
(income) 141 (173) 471 287
--- ---- --- ---
Adjusted
EBITDA 45,489 37,316 182,897 169,048
Rent 11,739 11,802 46,407 47,468
------ ------ ------ ------
Adjusted
EBITDAR $57,228 $49,118 $229,304 $216,516
======= ======= ======== ========
Net Income Attributable to
Susser Holdings
Corporation
Impact of Unusual Items
-----------------------
Twelve Months Ended
-------------------
December 30, December 29,
2012 2013
---- ----
(dollars in thousands,
except per share amounts)
After- Diluted After- Diluted
Tax EPS Tax EPS
Income Income
------- ------ ------- ------
As
Reported $46,725 $2.19 $14,331 $0.66
Non-
cash
deferred
tax
charge
on
SUSP
IPO 3,616 0.17 - -
May
2013
refinancing - - 16,744 0.77
Non-
cash
deferred
tax
charge
on
GFI
Contribution - - 3,609 0.17
As
Adjusted $50,341 $2.36 $34,684 $1.60
======= ===== ======= =====
SOURCE Susser Holdings Corporation
