Northern Tier to Expand Its SuperAmerica Network

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Northern Tier to Expand Its SuperAmerica Network

05/14/2013

RIDGEFIELD, Conn. -- Northern Tier Energy LP will expand its SuperAmerica convenience store network, co-founder and CEO Hank Kuchta noted during the company's 2013 fiscal first-quarter earnings call today.

He did not expand on the comment nor detail whether the company will seek to add more company-operated stores in addition to increasing its franchisee network. Analysts chose not to follow up on the topic in the question-and-answer session that followed Northern Tier's prepared remarks on today's call.

However, in March, Northern Tier's Director of Planning and Strategy Maria Testani told CSNews Online that the company would definitely increase the number of stores that license and brand the SuperAmerica name, which currently totals more than 70.

As of March 31, Ridgefield, Conn.-based Northern Tier Energy operated 166 company-owned stores -- unchanged from the prior two quarters -- primarily in Minnesota and Wisconsin.

As for its latest quarter, SuperAmerica earned a profit of $600,000 vs. a $400,000 loss in its 2012 first quarter. Cost-reduction efforts were cited for the $1 million profit improvement. Breaking down the retail results further, SuperAmerica sold 74.6 gallons of fuel in its latest quarter and achieved a 16 cent-per-gallon margin.

Merchandise sales declined to $75.8 million, a $3 million decline compared to the year-ago period. Merchandise margins, however, rose strongly to 27.3 percent vs. 25.8 percent one year ago.

"Our retail stores continue to be an excellent outlet for our fuel business," the chief executive mentioned during today's earnings call.

Companywide, the master limited partnership's (MLP) quarterly earnings rose sharply. Northern Tier earned Q1 profits of $119.4 million, compared to a loss of $193.6 million in the same period a year ago. Much of the earnings rise came from stronger results in its refining segment.

The company also declared its third distribution since its July 31 initial public offering. Northern Tier will pay $1.23 per unit on May 30. But the MLP noted that the quarterly distribution will change in the future based on several factors including fuel prices and feedstock costs.

Northern Tier possessed $178 million in cash and $282 million in debt as of March 31.