A New Era for CrossAmerica Partners
ALLENTOWN, Pa. — CrossAmerica Partners LP is excited for a new era of the company, one that includes a close relationship with convenience store retailer CST Brands Inc., CrossAmerica President and CEO Joe Topper said during Thursday's 2014 fiscal third-quarter earnings call.
The former Lehigh Gas Partners LP recently completed its first transaction with CST, buying 24 Nice N Easy Grocery Shoppes in upstate New York. Under the terms of the agreement, CrossAmerica acquired the real estate for the properties, as well as certain wholesale fuel supply related assets for $65 million. In turn, CrossAmerica is leasing both to CST under long-term agreements.
"This transaction provides an additional form of stable income," Topper said on the call. "It [also] allows CST to do what it does best. Namely, run the retail sites."
CST, parent of the Corner Store chain of convenience stores, completed an acquisition on Oct. 1 of the general partner of CrossAmerica Partners, a master limited partnership. As part of the agreement, CST acquired several hundred retail locations.
Allentown-based CrossAmerica operated those retail sites for the entire third quarter, however, for which it reported results Thursday. During its last quarter as a retail operator, CrossAmerica's retail division saw fuel margins per gallon rise 12 percent compared to the same timeframe in 2013. Gross profit from fuel sales increased 85.4 percent to $21.6 million.
Companywide, CrossAmerica earned a net profit of $4.2 million in its most recent quarter and had $13.6 million in distributable cash flow. Total revenues totaled $832.7 million for the quarter, with a large portion of these revenues coming from fuel sales.
"Our results this quarter reflect the continued strength of the operating environment from the second quarter," said Topper. "We were also successful during the quarter with our capital-raising activities, positioning the partnership's balance sheet to support future growth."