Pantry Revises Forecast on Lower Gas Margins

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Pantry Revises Forecast on Lower Gas Margins

SANFORD, N.C. -- The Pantry Inc., operator of more than 1,600 convenience stores in the southeast, revealed preliminary financial results for its third fiscal quarter ending June 28, which include lower earnings due to lower gasoline margins and pricing pressure, the company stated.

"These preliminary results primarily reflect our relatively low gasoline margins during the quarter as compared to the prior year quarter," Chairman and CEO Peter J. Sodini said in a written statement. "This period was characterized by upward pricing pressure due to production constraints at U.S. refineries."

The company expects earnings per share for the full fiscal year to range between $1.65 and $1.80 -- a drop from the previous guidance range. The company earnings before interest, taxes, depreciation and amortization (EBITDA) is estimated to range from $234 million to $240 million, Sodini added.

"Although fiscal 2007 has been a challenging year, we do not believe there has been a material change in the long-term fundamentals of our business. In fact, our competitive position in the marketplace has clearly improved with the strategic acquisitions we have completed this year," he said.

Net income for the company is expected to total between $37.8 million and $41.4 million. For the company's fiscal 2008, provided average gasoline margins are more in line with historical performance in the mid- to high-12 cents per gallon, the company predicted earnings per share and EBITDA to range between $2.70 to $3, and $304 to $316 million, respectively, excluding future acquisitions, Sodini concluded.

The Pantry's final third quarter results will be released on Aug. 2.