Couche-Tard Grows on Acquisitions and Retail Fuel Prices

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Couche-Tard Grows on Acquisitions and Retail Fuel Prices

LAVAL, Quebec -- Thanks to Alimentation Couche-Tard's acquisitions over the past year, along with higher retail fuel prices, the company saw continued growth in revenue for the third quarter of fiscal 2008, rising 31.2 percent to $4.6 billion, the company stated. Of the increase in revenue, $613.5 million was contributed to the sharp rise in gas prices, while acquisitions totaled $314.2 million.

Couche-Tard saw net earnings reach $50.5 million, from $43.7 million seen in the comparable quarter of fiscal 2007, a 15.6 percent increase. Earnings before interests, taxes, depreciation and amortization (EBITDA) rose 4.5 percent to $130.6 million in the third quarter, with the company’s major acquisitions during the past year contributing $5.9 million, the company stated.

"Given the more difficult economic climate in certain regions of the United States and the negative effect on merchandise and service revenues, motor fuel volume sold and margins, we are satisfied with the results achieved," Alain Bouchard, chairman of the board, president and CEO of Couche-Tard, said in a statement. "Past experience has shown us that Couche-Tard has managed to thrive in unfavorable economic periods, for instance through profitable acquisitions, and our intention is to once again pursue that path."

During the quarter, the company's store count grew by 55 acquisitions and 68 openings, constructions or additions, while the company closed 70 stores, resulting in a total store count of 5,690 at the quarter ended Feb. 3, 2008, according to the company.

For the total of fiscal 2008, Couche-Tard expects to deploy the IMPACT program in approximately 400 stores and build or acquire approximately 60 stores on an individual basis, the company stated. Concerning store acquisitions, the company is confident it can enter acquisition agreements that could add approximately 250 company-operated stores before the end of the fiscal year, the company stated.

"Past experience has shown us that we are able to thrive in unfavorable economic periods, namely through well-selected and profitable acquisitions," Bouchard said in a statement. "Our objective for future quarters is to pursue that path while maintaining a sound financial position."

The company also implemented its IMPACT program in 115 company-operated stores, now bringing the percentage of company-operated stores with the IMPACT program in place to 59 percent, according to the company.

During the quarter, the company also entered in a sale-leaseback transaction through its subsidiaries Circle K Stores Inc. and Mac's Convenience Stores LLC, with Cole Credit Property Trust II Inc., for 83 properties across several states, sold at $131.4 million, the company stated. The proceeds of which were used primarily to reduce its term revolving unsecured operating credit, according to the company.

Same store merchandise revenues for the company increased 2.4 percent in the U.S., which followed positive trends for the first six months despite economic slowdown in some regions. In Canada, same store merchandise sales increased 1.6 percent, and the company attributed a slowdown in performance to the weather and an increase in contraband cigarette sales.