Q3 Performance Roundup: CrossAmerica, Delek US & Global Partners

11/21/2019
CrossAmerica

NATIONAL REPORT — Convenience store retailers reported variable results during their earnings calls for the third quarter of 2019.

CROSSAMERICA PARTNERS LP

CrossAmerica Partners reported net income of $7.2 million during the third quarter of 2019, compared to net income of $5.3 million for the same quarter a year ago. Adjusted EBITDA rose 1 percent year over year to $29 million.

President and CEO Gerardo Valencia noted that future earnings calls will see a change in focus. On Oct. 1, CrossAmerica announced its exit from direct retail operations as it closed on an agreement with Applegreen plc through which Applegreen will operate 46 company-operated retail stores in the Upper Midwest.

"This now positions us to be solely focused on our wholesale operations going forward," Valencia said.

During Q3 2019, CrossAmerica's retail segment sold 39.3 million gallons of motor fuel for a gross profit of $1.2 million, compared to 53.6 million gallons of fuel for a gross profit of $2.1 million in Q3 2018. 

Merchandise and services generated $2.1 million in gross profit during the quarter, compared to $6.5 million for the same time period in 2018.

Allentown, Pa.-based CrossAmerica is a wholesale distributor of motor fuels and owner and lessee of real estate used in the retail distribution of motor fuels. Formed in 2012, the company distributes fuel to approximately 1,300 locations and owns or leases more than 1,000 sites. With a geographic footprint covering 34 states, the partnership has relationships with several major oil brands, including ExxonMobil, BP, Shell, Chevron, Sunoco, Valero, Gulf, CITGO, Marathon and Phillips 66.

DELEK US HOLDINGS Inc.

Delek US Holdings reported net income of $51.3 million for the third quarter of 2019, down from net income of $179.8 million for Q3 2018. Adjusted EBITDA was $163.1 million compared to $325.5 million one year ago.

Company officials cited a lower crude differential environment as the reason for the overall decrease in year-over-year results. 

In the company's retail segment, contribution margin was $18.6 million for the quarter, compared to $15.3 million for the prior-year quarter. Merchandise sales were approximately $81.5 million with an average retail margin of 30.5 percent, declining from $89.7 million with an average retail margin of 31.3 percent during Q3 2018.

Approximately 54.9 million fuel gallons were sold at an average margin of 31 cents per gallon, compared to 56 million retail fuel gallons sold at an average margin of 23 cents per gallon during the prior-year quarter.

On a same-store basis, merchandise sales decreased 1.5 percent while fuel gallons sold increased 3 percent. The average store count during the third quarter was 263, down from 295 locations in Q3 2018.

Brentwood, Tenn.-based Delek US Holdings is a diversified downstream energy company with assets in petroleum refining, logistics, renewable fuels and convenience retailing. Its convenience store business is the largest 7-Eleven licensee in the United States.

GLOBAL PARTNERS LP

Global Partners continues to turn in strong results driven by two acquisition deals it completed in 2018. The Waltham, Mass.-based company closed on its acquisitions of Vermont-based Champlain Oil Co. Inc.'s retail assets and Keene, N.H.-based Cheshire Oil Co. LLC's convenience store portfolio in July 2018. 

"We delivered strong third-quarter results highlighted by product margin increases,"  President and CEO Eric Slifka said during the company's third-quarter 2019 earnings call, held Nov. 7. "In our gasoline distribution and station operations (GDSO) segment, we benefited from higher retail fuel margins and a full quarter of results from our Champlain and Cheshire Oil portfolio of retail stations and convenience stores, which we acquired in July of last year. In our wholesale segment, product lines primarily benefited from favorable market conditions."

For the quarter, Global Partners reported adjusted EBITDA of $66.1 million vs. $37.2 million for the same period last year. Combined product margins in the quarter increased to $210.2 million vs. $157.2 million in Q3 2018. GDSO segment product margin increased by $20.1 million, going from $148.6 million to $168.7 million, primarily driven by higher fuel margins and a full quarter of results from the acquisitions of Champlain Oil and Cheshire Oil.

Global Partners operates approximately 1,600 locations primarily in the Northeast. It is one of the region's largest independent owners, suppliers and operators of gasoline stations and convenience stores.

X
This ad will auto-close in 10 seconds