ARKO Corp. (Nasdaq: ARKO) (“ARKO” or the “Company”), a Fortune 500
company and one of the largest convenience store operators in the
United States, today announced financial results for the quarter
ended March 31, 2023.
First Quarter 2023 Key Highlights1
- Operating income for the quarter was
$9.0 million, compared to $19.3 million in the prior year
quarter.
- Net loss for the quarter was $2.5
million, compared to net income of $2.3 million in the prior year
quarter.
- Adjusted EBITDA for the quarter was
$47.5 million, a decrease of $2.6 million, as compared to the prior
year quarter.
- Same store merchandise sales
excluding cigarettes increased 7.6% for the quarter compared to
0.1% in the prior year period; same store merchandise sales
increased 3.8% for the quarter compared to the prior year
period.
- Merchandise gross profit
contribution grew by $8.1 million for the quarter, or 7.7%, on a
same store basis, as compared to the prior year period.
- Merchandise margin increased 120
basis points to 30.7% for the quarter compared to 29.5% in the
prior year period.
Other Key Highlights
- On March 1, 2023, closed acquisition
of the assets of Transit Energy Group and its affiliates ("TEG")
adding 135 convenience stores and 192 dealer locations; WTG Fuels
Holdings LLC ("WTG") acquisition expected to close in Q2 2023.
- Currently available capital of more
than $2 billion dollars, including cash, lines of credit and Oak
Street agreement.
- Renewal and increase of GPMP credit
line to $800 million, extending maturity to 2028.
- Amended and extended the program
agreement with Oak Street, a division of Blue Owl Capital (“Oak
Street”), with capacity of up to $1.5 billion until September
2024.
- Released significantly updated fas
REWARDS® loyalty app, with promising early results.
- ARKO Corp.’s Board of Directors
declared a quarterly dividend of $0.03 per share of common stock to
be paid on June 1, 2023, to stockholders of record as of May 19,
2023.
“This was another strong quarter, with robust in-store
performance as we continued to execute our strategy to grow our
core convenience store business and our many initiatives continued
to gain traction, showing that our value proposition, customer
service, and merchandising mix is resonating with customers and
creating sales growth,” said Arie Kotler, Chairman, President and
Chief Executive Officer of ARKO. “We will continue to execute our
strategy, driving sales in our stores and building value for our
customers through targeted value-add initiatives, and at the same
time grow our business through M&A. ARKO has secured financial
commitments that we believe underscore the confidence seasoned
investors have in our long-term growth strategy. With our strong
balance sheet, ample liquidity, and multiple paths for growth, I
have confidence that we can continue to create stockholder value
over the long-term.”
1 See Use of Non-GAAP Measures below.
First Quarter 2023 Segment Highlights
Retail
|
For the Three MonthsEnded
March 31, |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
(in thousands) |
|
Fuel gallons sold |
|
248,906 |
|
|
|
239,558 |
|
Same store fuel gallons sold
decrease (%)1 |
|
(5.8 |
%) |
|
|
(3.1 |
%) |
Fuel margin, cents per
gallon2 |
|
35.4 |
|
|
|
37.5 |
|
Merchandise revenue |
$ |
400,408 |
|
|
$ |
366,985 |
|
Same store merchandise sales
increase (decrease) (%)1 |
|
3.8 |
% |
|
|
(3.5 |
%) |
Same store merchandise sales
excluding cigarettes increase (%)1 |
|
7.6 |
% |
|
|
0.1 |
% |
Merchandise contribution3 |
$ |
122,965 |
|
|
$ |
108,192 |
|
Merchandise margin4 |
|
30.7 |
% |
|
|
29.5 |
% |
|
|
|
|
|
|
1Same store is a
common metric used in the convenience store industry. We consider a
store a same store beginning in the first quarter in which the
store had a full quarter of activity in the prior year. Refer toUse
of Non-GAAP Measuresbelow for discussion of this measure. |
|
|
|
|
|
|
|
2Calculated as
fuel revenue less fuel costs divided by fuel gallons sold; excludes
the estimated fixed margin or fixed fee paid to GPMP for the cost
of fuel. |
|
|
|
|
|
|
|
3Calculated as
merchandise revenue less merchandise costs. |
|
|
|
|
|
|
|
4Calculated as
merchandise contribution divided by merchandise revenue. |
|
For the first quarter, retail fuel profitability (excluding
intercompany charges by the Company’s wholesale fuel distribution
subsidiary, GPM Petroleum LP (“GPMP”)) decreased approximately $1.7
million to $88.1 million compared to the prior year period, with
strong fuel margin capture of 35.4 cents per gallon, which
decreased $0.02 for the first quarter compared to the prior year
period. Same store fuel profit was $76.3 million (excluding
intercompany charges by GPMP), compared to $87.7 million for the
prior year quarter. The decrease in same store fuel profit was
partially offset by $10.8 million dollars incremental fuel profit
from recent acquisitions.
Same store merchandise sales excluding cigarettes increased 7.6%
for the quarter compared to 0.1% in the first quarter of 2022. Same
stores sales increased 3.8% compared to a decrease of 3.5% in the
prior year period. Total merchandise contribution for the quarter
increased $14.8 million, or 13.7%, compared to the first quarter of
2022, with merchandise margin increasing 120 basis points, to 30.7%
from 29.5% in Q1 2022, as a result of favorable changes in sales
mix and the continued result of the Company’s multiple initiatives.
The increase in merchandise contribution was due to $8.3 million
from recent acquisitions, and an increase at same stores of $8.1
million.
Wholesale
|
For the Three MonthsEnded
March 31, |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
(in thousands) |
|
Fuel gallons sold – fuel supply locations |
|
182,427 |
|
|
|
180,941 |
|
Fuel gallons sold –
consignment agent locations |
|
37,962 |
|
|
|
35,997 |
|
Fuel margin, cents per
gallon1– fuel supply locations |
|
6.1 |
|
|
|
7.0 |
|
Fuel margin, cents per
gallon1– consignment agent locations |
|
26.4 |
|
|
|
29.0 |
|
|
|
|
|
|
|
1Calculated as
fuel revenue less fuel costs divided by fuel gallons sold; excludes
the estimated fixed margin or fixed fee paid to GPMP for the cost
of fuel. |
|
Wholesale fuel contribution (excluding intercompany charges by
GPMP) decreased by approximately $1.8 million for the quarter.
Fuel contribution from fuel supply locations (excluding
intercompany charges by GPMP) decreased by $1.4 million for the
quarter, primarily due to decreased prompt pay discounts related to
lower fuel costs, which was partially offset by contributions from
the Quarles and TEG acquisitions.
Fuel contribution from consignment agent locations (excluding
intercompany charges by GPMP) decreased approximately $0.4 million
for the quarter. For the quarter, the decrease was primarily due to
lower rack-to-retail margins and decreased prompt pay discounts
related to lower fuel costs, which was partially offset by
contributions from the Quarles and TEG acquisitions.
Fleet Fueling
|
For the Three MonthsEnded March 31,
2023 |
|
|
(in thousands) |
|
Fuel gallons sold – proprietary cardlock locations |
|
31,016 |
|
Fuel gallons sold –
third-party cardlock locations |
|
1,610 |
|
Fuel margin, cents per
gallon1– proprietary cardlock locations |
|
44.5 |
|
Fuel margin, cents per
gallon1– third-party cardlock locations |
|
1.3 |
|
|
|
|
1Calculated as
fuel revenue less fuel costs divided by fuel gallons sold; excludes
the estimated fixed fee charged by GPMP to sites in the fleet
fueling segment. |
|
The Company recognized strong cash flow from the fleet fueling
segment during the quarter. Fuel profitability (excluding
intercompany charges by GPMP) was approximately $13.8 million for
the quarter2.
2 Fleet fueling segment reflects a commencement of operations of
such segment on July 22, 2022.
Store Operating Expenses
For the first quarter, convenience store operating expenses
increased $18.9 million, or 12.1% as compared to the prior year
period, primarily due to $15.9 million of expenses related to the
Pride and TEG acquisitions and an increase in expenses at same
stores, including $6.0 million, or 9.7% as compared to the prior
year period, of higher personnel costs. The increase in store
operating expenses was partially offset by underperforming retail
stores that were closed or converted to dealers.
Long-Term Growth Strategy Updates
Credit Line Increase and Renewal
On May 5, 2023, GPMP renewed and extended its revolving credit
facility with a syndicate of banks led by Capital One, National
Association. The credit line was increased to $800 million, and its
maturity was extended to May 2028.
Extension of Oak Street Program Agreement
On May 2, 2023, GPM, together with affiliates of Oak Street,
entered into a third amendment to the Program Agreement, which,
among other things, extended the term of the Program Agreement and
the exclusivity period thereunder through September 30, 2024, and
provides for up to $1.5 billion of capacity under the Program
Agreement from the date of such amendment through September 30,
2024, not including the funding for the WTG Acquisition.
Acquisitions
On March 1, 2023, the Company closed on its acquisition of the
assets of TEG, which, at closing, operated 135 convenience stores,
supplied fuel to 192 dealer locations, and operated a
transportation business that supports the retail and wholesale
business, all in the Southeastern United States. This acquisition
expanded ARKO’s southern retail territory into Alabama and
Mississippi.
ARKO expects that its previously announced acquisition of WTG
will close in the second quarter of 2023. This acquisition would
add 24 company-operated Uncle’s convenience stores across western
Texas. As part of this acquisition, the Company would also acquire
WTG’s GASCARD-branded fleet fueling network, including 66
proprietary fleet fueling cardlock sites strategically located in
large industrial areas in West Texas and southeast New Mexico and
43 private cardlock sites.
Liquidity and Capital Expenditures
As of March 31, 2023, and after consummating the TEG
acquisition, the Company’s total liquidity was approximately $580
million, consisting of cash and cash equivalents of approximately
$256 million and approximately $321 million of availability under
lines of credit. Outstanding debt was $809 million, resulting in
net debt, excluding financing leases, of approximately $553
million. Capital expenditures were approximately $23.4 million for
the quarter.
Quarterly Dividend and Share Repurchase
Program
The Company’s ability to return cash to its stockholders through
its cash dividend program and share repurchase program is
consistent with its capital allocation framework and reflects the
Company’s confidence in the strength of its cash generation ability
and financial position.
The Company’s Board of Directors declared a quarterly dividend
of $0.03 per share of common stock, to be paid on June 1, 2023, to
stockholders of record as of May 19, 2023.
In February 2022, the Company’s Board of Directors authorized a
share repurchase program for up to an aggregate of $50 million of
outstanding shares of common stock. During the quarter, the Company
repurchased approximately 89 thousand shares of common stock under
the repurchase program for approximately $0.7 million, or an
average share price of $7.97. There is approximately $10.3 million
remaining under the share repurchase program.
Company-Operated Retail Store Count and Segment
Update
The following tables present certain information regarding
changes in the retail, wholesale and fleet fueling segments for the
periods presented:
|
For the Three MonthsEnded
March 31, |
|
Retail
Segment |
2023 |
|
|
2022 |
|
Number of sites at beginning of period |
|
1,404 |
|
|
|
1,406 |
|
Acquired sites |
|
135 |
|
|
|
— |
|
Newly opened or reopened
sites |
|
1 |
|
|
|
— |
|
Company-controlled sites
converted to |
|
|
|
|
|
consignment or fuel supply
locations, net |
|
(5 |
) |
|
|
(6 |
) |
Closed, relocated or divested
sites |
|
(4 |
) |
|
|
(4 |
) |
Number of sites at end of
period |
|
1,531 |
|
|
|
1,396 |
|
|
For the Three MonthsEnded
March 31, |
|
Wholesale
Segment1 |
2023 |
|
|
2022 |
|
Number of sites at beginning of period |
|
1,674 |
|
|
|
1,628 |
|
Acquired sites |
|
192 |
|
|
|
— |
|
Newly opened or reopened
sites2 |
|
7 |
|
|
|
19 |
|
Consignment or fuel supply
locations |
|
|
|
|
|
converted from
Company-controlled sites, net |
|
5 |
|
|
|
6 |
|
Closed, relocated or divested
sites |
|
(26 |
) |
|
|
(28 |
) |
Number of sites at end of
period |
|
1,852 |
|
|
|
1,625 |
|
|
|
|
|
|
|
1Excludes bulk and
spot purchasers. |
|
2Includes all
signed fuel supply agreements irrespective of fuel distribution
commencement date. |
|
|
For the Three Months Ended |
|
Fleet Fueling
Segment |
March 31, 2023 |
|
Number of sites at beginning of period |
|
183 |
|
Acquired sites |
|
— |
|
Number of sites at end of
period |
|
183 |
|
Conference Call and Webcast Details
The Company will host a conference call to discuss these results
at 10:00 a.m. Eastern Time on May 9, 2023. Investors and analysts
interested in participating in the live call can dial 877-605-1792
or 201-689-8728.
A simultaneous, live webcast will also be available on the
Investor Relations section of the Company’s website at
https://www.arkocorp.com/news-events/ir-calendar. The webcast will
be archived for 30 days.
About ARKO Corp.
ARKO Corp. (Nasdaq: ARKO) is a Fortune 500 company that owns
100% of GPM Investments, LLC and is one of the largest operators of
convenience stores and wholesalers of fuel in the United States.
Based in Richmond, VA, our highly recognizable family of community
brands offers delicious, prepared foods, beer, snacks, candy, hot
and cold beverages, and multiple popular quick serve restaurant
brands. Our high value fas REWARDS® loyalty program offers
exclusive savings on merchandise and gas. We operate in four
reportable segments: retail, which includes convenience stores
selling merchandise and fuel products to retail customers;
wholesale, which supplies fuel to independent dealers and
consignment agents; GPM Petroleum, which sells and supplies fuel to
our retail and wholesale sites and charges a fixed fee, primarily
to our fleet fueling sites; and fleet fueling, which includes the
operation of proprietary and third-party cardlock locations, and
issuance of proprietary fuel cards that provide customers access to
a nationwide network of fueling sites. To learn more about GPM
stores, visit: www.gpminvestments.com. To learn more about ARKO,
visit: www.arkocorp.com.
Forward-Looking Statements
This document includes certain “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act
of 1995. These forward-looking statements may address, among other
things, the Company’s expected financial and operational results
and the related assumptions underlying its expected results. These
forward-looking statements are distinguished by use of words such
as “anticipate,” “aim,” “believe,” “continue,” “could,” “estimate,”
“expect,” “intends,” “may,” “might,” “plan,” “possible,”
“potential,” “predict,” “project,” “should,” “will,” “would” and
the negative of these terms, and similar references to future
periods. These statements are based on management’s current
expectations and are subject to uncertainty and changes in
circumstances. Actual results may differ materially from these
expectations due to, among other things, changes in economic,
business and market conditions; the Company’s ability to maintain
the listing of its common stock and warrants on the Nasdaq Stock
Market; changes in its strategy, future operations, financial
position, estimated revenues and losses, projected costs, prospects
and plans; expansion plans and opportunities; changes in the
markets in which it competes; changes in applicable laws or
regulations, including those relating to environmental matters;
market conditions and global and economic factors beyond its
control; and the outcome of any known or unknown litigation and
regulatory proceedings. Detailed information about these factors
and additional important factors can be found in the documents that
the Company files with the Securities and Exchange Commission, such
as Form 10-K, Form 10-Q and Form 8-K. Forward-looking statements
speak only as of the date the statements were made. The Company
does not undertake an obligation to update forward-looking
information, except to the extent required by applicable law.
Use of Non-GAAP Measures
The Company discloses certain measures on a “same store basis,”
which is a non-GAAP measure. Information disclosed on a “same store
basis” excludes the results of any store that is not a “same store”
for the applicable period. A store is considered a same store
beginning in the first quarter in which the store had a full
quarter of activity in the prior year. The Company believes that
this information provides greater comparability regarding its
ongoing operating performance. Neither this measure nor those
described below should be considered an alternative to measurements
presented in accordance with generally accepted accounting
principles in the United States (“GAAP”).
The Company defines EBITDA as net (loss) income before net
interest expense, income taxes, depreciation and amortization.
Adjusted EBITDA further adjusts EBITDA by excluding the gain or
loss on disposal of assets, impairment charges, acquisition costs,
other non-cash items, and other unusual or non-recurring charges.
Each of EBITDA and Adjusted EBITDA is a non-GAAP financial
measure.
The Company uses EBITDA and Adjusted EBITDA for operational and
financial decision-making and believe these measures are useful in
evaluating its performance because they eliminate certain items
that it does not consider indicators of its operating performance.
EBITDA and Adjusted EBITDA are also used by many of its investors,
securities analysts, and other interested parties in evaluating its
operational and financial performance across reporting periods. The
Company believes that the presentation of EBITDA and Adjusted
EBITDA provides useful information to investors by allowing an
understanding of key measures that it uses internally for
operational decision-making, budgeting, evaluating acquisition
targets, and assessing its operating performance.
EBITDA and Adjusted EBITDA are not recognized terms under GAAP
and should not be considered as a substitute for net (loss) income
or any other financial measure presented in accordance with GAAP.
These measures have limitations as analytical tools and should not
be considered in isolation or as substitutes for analysis of its
results as reported under GAAP. The Company strongly encourages
investors to review its financial statements and publicly filed
reports in their entirety and not to rely on any single financial
measure.
Because non-GAAP financial measures are not standardized, same
store measures, EBITDA and Adjusted EBITDA, as defined by the
Company, may not be comparable to similarly titled measures
reported by other companies. It therefore may not be possible to
compare the Company’s use of these non-GAAP financial measures with
those used by other companies.
Media ContactAndrew PetroMatter on behalf of
ARKO(978) 518-4531apetro@matternow.com
Investor ContactRoss ParmanARKO
Corp.investors@gpminvestments.com
|
Condensed consolidated statements of
operations |
|
|
|
|
|
For the Three MonthsEnded
March 31, |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
(in thousands) |
|
Revenues: |
|
|
|
|
|
Fuel revenue |
$ |
1,661,664 |
|
|
$ |
1,583,526 |
|
Merchandise revenue |
|
400,408 |
|
|
|
366,985 |
|
Other revenues, net |
|
26,424 |
|
|
|
22,300 |
|
Total
revenues |
|
2,088,496 |
|
|
|
1,972,811 |
|
Operating
expenses: |
|
|
|
|
|
Fuel costs |
|
1,537,882 |
|
|
|
1,470,649 |
|
Merchandise costs |
|
277,443 |
|
|
|
258,793 |
|
Store operating expenses |
|
192,683 |
|
|
|
166,538 |
|
General and administrative expenses |
|
40,416 |
|
|
|
31,785 |
|
Depreciation and amortization |
|
28,399 |
|
|
|
24,636 |
|
Total operating
expenses |
|
2,076,823 |
|
|
|
1,952,401 |
|
Other expenses, net |
|
2,720 |
|
|
|
1,121 |
|
Operating
income |
|
8,953 |
|
|
|
19,289 |
|
Interest and other financial income |
|
7,210 |
|
|
|
1,106 |
|
Interest and other financial expenses |
|
(20,812 |
) |
|
|
(17,081 |
) |
(Loss) income before
income taxes |
|
(4,649 |
) |
|
|
3,314 |
|
Income tax benefit (expense) |
|
2,158 |
|
|
|
(1,005 |
) |
(Loss) income from equity investment |
|
(36 |
) |
|
|
9 |
|
Net (loss)
income |
$ |
(2,527 |
) |
|
$ |
2,318 |
|
Less: Net income attributable
to non-controlling interests |
|
53 |
|
|
|
79 |
|
Net (loss) income
attributable to ARKO Corp. |
$ |
(2,580 |
) |
|
$ |
2,239 |
|
Series A redeemable preferred
stock dividends |
|
(1,418 |
) |
|
|
(1,418 |
) |
Net (loss) income
attributable to common shareholders |
$ |
(3,998 |
) |
|
$ |
821 |
|
Net (loss) income per share
attributable to common shareholders - basic |
$ |
(0.03 |
) |
|
$ |
0.01 |
|
Net loss per share
attributable to common shareholders - diluted |
$ |
(0.03 |
) |
|
$ |
(0.00 |
) |
Weighted average shares
outstanding: |
|
|
|
|
|
Basic |
|
120,253 |
|
|
|
124,301 |
|
Diluted |
|
120,253 |
|
|
|
125,433 |
|
|
Condensed consolidated balance sheets |
|
|
|
|
|
|
|
|
March 31, 2023 |
|
|
December 31, 2022 |
|
|
|
|
|
(in thousands) |
|
Assets |
|
|
|
|
|
Current
assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
255,852 |
|
|
$ |
298,529 |
|
Restricted cash |
|
15,750 |
|
|
|
18,240 |
|
Short-term investments |
|
3,065 |
|
|
|
2,400 |
|
Trade receivables, net |
|
129,039 |
|
|
|
118,140 |
|
Inventory |
|
244,940 |
|
|
|
221,951 |
|
Other current assets |
|
88,354 |
|
|
|
87,873 |
|
Total current
assets |
|
737,000 |
|
|
|
747,133 |
|
Non-current
assets: |
|
|
|
|
|
Property and equipment, net |
|
780,950 |
|
|
|
645,809 |
|
Right-of-use assets under operating leases |
|
1,373,727 |
|
|
|
1,203,188 |
|
Right-of-use assets under financing leases, net |
|
179,166 |
|
|
|
182,113 |
|
Goodwill |
|
217,297 |
|
|
|
217,297 |
|
Intangible assets, net |
|
226,134 |
|
|
|
197,123 |
|
Equity investment |
|
2,888 |
|
|
|
2,924 |
|
Deferred tax asset |
|
32,958 |
|
|
|
22,728 |
|
Other non-current assets |
|
40,677 |
|
|
|
36,855 |
|
Total
assets |
$ |
3,590,797 |
|
|
$ |
3,255,170 |
|
Liabilities |
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
Long-term debt, current portion |
$ |
15,034 |
|
|
$ |
11,944 |
|
Accounts payable |
|
222,782 |
|
|
|
217,370 |
|
Other current liabilities |
|
186,225 |
|
|
|
154,097 |
|
Operating leases, current portion |
|
61,797 |
|
|
|
57,563 |
|
Financing leases, current portion |
|
5,219 |
|
|
|
5,457 |
|
Total current
liabilities |
|
491,057 |
|
|
|
446,431 |
|
Non-current
liabilities: |
|
|
|
|
|
Long-term debt, net |
|
793,596 |
|
|
|
740,043 |
|
Asset retirement obligation |
|
72,350 |
|
|
|
64,909 |
|
Operating leases |
|
1,386,604 |
|
|
|
1,218,045 |
|
Financing leases |
|
224,997 |
|
|
|
225,907 |
|
Other non-current liabilities |
|
247,158 |
|
|
|
178,945 |
|
Total
liabilities |
|
3,215,762 |
|
|
|
2,874,280 |
|
|
|
|
|
|
|
Series A redeemable
preferred stock |
|
100,000 |
|
|
|
100,000 |
|
|
|
|
|
|
|
Shareholders'
equity: |
|
|
|
|
|
Common stock |
|
12 |
|
|
|
12 |
|
Treasury stock |
|
(42,352 |
) |
|
|
(40,042 |
) |
Additional paid-in capital |
|
234,158 |
|
|
|
229,995 |
|
Accumulated other comprehensive income |
|
9,119 |
|
|
|
9,119 |
|
Retained earnings |
|
74,143 |
|
|
|
81,750 |
|
Total shareholders'
equity |
|
275,080 |
|
|
|
280,834 |
|
Non-controlling interest |
|
(45 |
) |
|
|
56 |
|
Total
equity |
|
275,035 |
|
|
|
280,890 |
|
Total liabilities,
redeemable preferred stock and equity |
$ |
3,590,797 |
|
|
$ |
3,255,170 |
|
|
Condensed consolidated statements of cash
flows |
|
|
|
|
|
|
|
|
For the Three MonthsEnded
March 31, |
|
|
2023 |
|
|
2022 |
|
|
(in thousands) |
|
Cash flows from operating
activities: |
|
|
|
|
|
Net (loss) income |
$ |
(2,527 |
) |
|
$ |
2,318 |
|
Adjustments to reconcile
net(loss) income to net cash provided by operating activities: |
|
|
|
|
|
Depreciation and amortization |
|
28,399 |
|
|
|
24,636 |
|
Deferred income taxes |
|
(10,230 |
) |
|
|
(2,577 |
) |
Loss on disposal of assets and impairment charges |
|
287 |
|
|
|
764 |
|
Foreign currency loss |
|
34 |
|
|
|
37 |
|
Amortization of deferred financing costs and debt discount |
|
592 |
|
|
|
634 |
|
Amortization of deferred income |
|
(1,860 |
) |
|
|
(3,078 |
) |
Accretion of asset retirement obligation |
|
491 |
|
|
|
409 |
|
Non-cash rent |
|
2,798 |
|
|
|
1,946 |
|
Charges to allowance for credit losses |
|
283 |
|
|
|
135 |
|
Loss (income) from equity investment |
|
36 |
|
|
|
(9 |
) |
Share-based compensation |
|
4,069 |
|
|
|
2,774 |
|
Fair value adjustment of financial assets and liabilities |
|
(4,228 |
) |
|
|
1,209 |
|
Other operating activities, net |
|
329 |
|
|
|
123 |
|
Changes in assets and liabilities: |
|
|
|
|
|
Increase in trade receivables |
|
(11,182 |
) |
|
|
(12,886 |
) |
Increase in inventory |
|
(2,845 |
) |
|
|
(21,318 |
) |
Decrease in other assets |
|
3,545 |
|
|
|
18,215 |
|
Increase in accounts payable |
|
5,940 |
|
|
|
20,177 |
|
Decrease in other current liabilities |
|
(127 |
) |
|
|
(4,561 |
) |
Increase (decrease) in asset retirement obligation |
|
67 |
|
|
|
(34 |
) |
Increase in non-current liabilities |
|
2,012 |
|
|
|
1,148 |
|
Net cash provided by operating
activities |
|
15,883 |
|
|
|
30,062 |
|
Cash flows from investing
activities: |
|
|
|
|
|
Purchase of property and
equipment |
|
(23,380 |
) |
|
|
(20,667 |
) |
Proceeds from sale of property
and equipment |
|
208,436 |
|
|
|
6,933 |
|
Prepayment for business
acquisition |
|
— |
|
|
|
(5,000 |
) |
Business acquisitions, net of
cash |
|
(338,342 |
) |
|
|
(6,746 |
) |
Decrease in investments, net |
|
— |
|
|
|
1,618 |
|
Net cash used in investing
activities |
|
(153,286 |
) |
|
|
(23,862 |
) |
Cash flows from financing
activities: |
|
|
|
|
|
Receipt of long-term debt,
net |
|
55,000 |
|
|
|
— |
|
Repayment of debt |
|
(5,592 |
) |
|
|
(3,157 |
) |
Principal payments on financing
leases |
|
(1,418 |
) |
|
|
(1,652 |
) |
Proceeds from sale-leaseback |
|
51,604 |
|
|
|
— |
|
Common stock repurchased |
|
(2,310 |
) |
|
|
(13,084 |
) |
Dividends paid on common
stock |
|
(3,609 |
) |
|
|
(2,474 |
) |
Dividends paid on redeemable
preferred stock |
|
(1,418 |
) |
|
|
(1,418 |
) |
Distributions to non-controlling
interests |
|
— |
|
|
|
(60 |
) |
Net cash provided by (used in)
financing activities |
|
92,257 |
|
|
|
(21,845 |
) |
Net decrease in cash and
cash equivalents and restricted cash |
|
(45,146 |
) |
|
|
(15,645 |
) |
Effect of exchange rate on cash
and cash equivalents and restricted cash |
|
(21 |
) |
|
|
(16 |
) |
Cash and cash equivalents and
restricted cash, beginning of period |
|
316,769 |
|
|
|
272,543 |
|
Cash and cash equivalents
and restricted cash, end of period |
$ |
271,602 |
|
|
$ |
256,882 |
|
|
Reconciliation of EBITDA and Adjusted EBITDA |
|
|
|
|
|
|
|
|
For the Three MonthsEnded
March 31, |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
(in thousands) |
|
Net (loss) income |
$ |
(2,527 |
) |
|
$ |
2,318 |
|
Interest and other financing
expenses, net |
|
13,602 |
|
|
|
15,975 |
|
Income tax (benefit)
expense |
|
(2,158 |
) |
|
|
1,005 |
|
Depreciation and
amortization |
|
28,399 |
|
|
|
24,636 |
|
EBITDA |
|
37,316 |
|
|
|
43,934 |
|
Non-cash rent expense (a) |
|
2,798 |
|
|
|
1,946 |
|
Acquisition costs (b) |
|
3,576 |
|
|
|
681 |
|
Loss on disposal of assets and
impairment charges (c) |
|
287 |
|
|
|
764 |
|
Share-based compensation
expense (d) |
|
4,069 |
|
|
|
2,774 |
|
Loss (income) from equity
investment (e) |
|
36 |
|
|
|
(9 |
) |
Adjustment to contingent
consideration (f) |
|
(702 |
) |
|
|
— |
|
Other (g) |
|
104 |
|
|
|
18 |
|
Adjusted
EBITDA |
$ |
47,484 |
|
|
$ |
50,108 |
|
|
|
|
|
|
|
(a) Eliminates the non-cash portion of rent, which reflects
the extent to which our GAAP rent expense recognized exceeds (or is
less than) our cash rent payments. The GAAP rent expense adjustment
can vary depending on the terms of our lease portfolio, which has
been impacted by our recent acquisitions. For newer leases, our
rent expense recognized typically exceeds our cash rent payments,
while for more mature leases, rent expense recognized is typically
less than our cash rent payments. |
|
|
|
|
|
|
|
(b) Eliminates costs incurred that are directly attributable
to historical business acquisitions and salaries of employees whose
primary job function is to execute our acquisition strategy and
facilitate integration of acquired operations. |
|
|
|
|
|
|
|
(c) Eliminates the non-cash loss (gain) from the sale of
property and equipment, the loss (gain) recognized upon the sale of
related leased assets, and impairment charges on property and
equipment and right-of-use assets related to closed and
non-performing sites. |
|
|
|
|
|
|
|
(d) Eliminates non-cash share-based compensation expense
related to the equity incentive program in place to incentivize,
retain, and motivate our employees, certain non-employees and
members of our Board. |
|
|
|
|
|
|
|
(e) Eliminates our share of loss (income) attributable to our
unconsolidated equity investment. |
|
|
|
|
|
|
|
(f) Eliminates fair value adjustments to the contingent
consideration owed to the seller for the 2020 acquisition of
Empire. |
|
|
|
|
|
|
|
(g) Eliminates other unusual or non-recurring items that we do
not consider to be meaningful in assessing operating
performance. |
|
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