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The Pantry Reports Record Third-Quarter Revenues

SANFORD, N.C. -- Sanford-based convenience store chain The Pantry Inc. reported total revenues for the third quarter of $935.9 million, a 31.5 percent increase from $711.5 million in the corresponding period last year. Net income for the quarter more than doubled to $13.7 million from $6.1 million a year ago, while diluted earnings per share were 66 cents, a 100 percent increase from 33 cents in last year's third quarter. The third quarter of fiscal 2003 included approximately $1.8 million (net of tax benefit of $1.1 million) of early debt extinguishment costs. Excluding those charges, net income for the third quarter of fiscal 2003 was $7.9 million, or 43 cents per share.

President and CEO Peter J. Sodini said, "We are very pleased with our record third-quarter financial results. Given the timing of our Golden Gallon acquisition last October, our refinancing transactions during the second fiscal quarter, and the seasonality of our business, this quarter was the first one in which we believe the full benefits of these transactions and management's initiatives are clearly apparent. At the same time, we continue to achieve solid results from our core convenience store operations, including the gasoline segment of our business, despite a challenging gasoline market environment."

Merchandise revenues for the quarter increased 3.5 percent on a comparable store basis, and rose 14.6 percent overall. The merchandise gross margin was 33.4 percent, down slightly from 33.5 percent a year ago, due to increased promotional activity. Total merchandise gross profits for the quarter were $101.1 million, a 14.2 percent increase from last year's third quarter. Commission income for the quarter was $8.2 million, up 26 percent from a year ago, partially due to increased revenues as a result of the new Tennessee state lottery.

Sodini concluded, "We expect our earnings per share for the fourth quarter of fiscal 2004 to nearly double the prior year level. With the substantial improvement in our operating performance, our increased financial flexibility, and the demonstrated benefits of integrating acquisitions, we look forward to capitalizing more fully on our strong market position in the Southeast over the next few years."
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