The Pantry's Preliminary Results Reflect Low Gas Margins

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The Pantry's Preliminary Results Reflect Low Gas Margins

SANFORD, N.C. -- Preliminary third-fiscal quarter financial results for The Pantry Inc., a more than 1,600-location convenience chain based here, showed evidence of the impact of lower gas margins on the company's performance.

"These preliminary results primarily reflect our relatively low gasoline margins during the quarter as compared to the prior year quarter. This period was characterized by upward pricing pressure due to production constraints at U.S. refineries," chairman and chief executive officer Peter J. Sodini said in a statement. "We now expect earnings per share for the full fiscal year to be between $1.65 and $1.80, which is below our previous guidance range."

The company expects net income to fall between $37.8 million and $41.4 million. Net income before interest expense and loss on extinguishment of debt, income taxes, depreciation and amortization (EBITDA) for fiscal 2007 is estimated to range between $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," Sodini concluded.

He also gave estimates for fiscal 2008. If average gasoline margins are in line with historical performance, around the mid- to high-12 cents per gallon, The Pantry expects EBITDA, excluding future acquisitions, in a range of $304 to $316 million.

The Pantry is expected to release final third-quarter financial results on Thursday.