The Pantry Inc. has announced the financial results for its fiscal fourth quarter and year ended Sept. 30, 2010. The quarter and year included 14 and 53 weeks, respectively, one more week than the comparable periods in fiscal 2009.
In the fourth quarter, net income for The Pantry totaled $8.5 million or $0.38 per diluted share, including charges of approximately $3 million after-tax. This compares to $12.5 million or $0.56 per diluted share in last year’s fourth quarter.
Excluding the charges, fourth quarter fiscal 2010 net income totaled $11.3 million or $0.50 per diluted share. Adjusted EBITDA was $66.2 million, compared to $70.8 million a year ago.
Merchandise revenue for the fourth quarter increased 12.0% overall and 5.7% on a comparable store basis from last year’s fourth quarter. Total merchandise gross profit for the quarter was $172.5 million, an increase of 13.1% from the fourth quarter a year ago. Merchandise gross margin improved to 34.4% from 34.0% in last year’s fourth quarter and from 34.2% in the third quarter fiscal 2010. Fuel gross profit was $61.9 million, compared to $76.4 million a year ago.
Fiscal Year 2010
For fiscal 2010, The Panty experienced a net loss of $165.6 million or $7.42 per basic share, compared to net income of $54.1 million or $2.42 per diluted share in fiscal 2009. Excluding the goodwill impairment and other charges, net income for fiscal year 2010 was $27.4 million or $1.22 per diluted share. Adjusted EBITDA was $237.6 million, compared to $281.3 million in fiscal 2009.
For the full year, merchandise revenue totaled approximately $1.80 billion, up 8.4% overall and 5.6% on a comparable store basis. Total merchandise gross profit for fiscal 2010 was $607.5 million, up 3.5% from a year ago. Merchandise gross margin was 33.8% compared to 35.4% in fiscal 2009. This decrease in margin was driven entirely by the full year impact of higher tobacco excise taxes.
Fuel gross profit was $264.7 million, compared to $311.3 million a year ago. Net cash provided by operating activities was $155 million compared to $169 million in fiscal 2009.
“We are pleased with the continued strength and quality of our merchandise business for the quarter, as evidenced by sequential improvement in both gross margin and non-cigarette comps, said Terrance Marks, president and CEO of The Pantry, which operates 1,672 stores in 13 states under select banners, including Kangaroo Express, its primary operating banner. “Importantly, we continued making solid progress on our core strategic initiatives, particularly Program Fresh. Our Raleigh stores were completed on schedule in the fourth quarter and have performed ahead of expectations. The store conversion process is progressing well and we now expect to finish the calendar year slightly ahead of our original remodel plan of 100 stores.”
Retail fuel gallons sold in the fourth quarter decreased 0.8% overall and 7.2% on a comparable store basis from last year’s fourth quarter. Retail fuel revenues in the fourth quarter increased 6.1% to $1.4 billion primarily as a result of the 7% increase in the average retail price per gallon to $2.63 from $2.45. Fuel gross profit for the fourth quarter decreased 19.0% compared to the same period a year ago, primarily due a decrease in retail fuel margin per gallon to $0.112 compared to $0.137.
For the full year, retail fuel gallons sold were approximately 2.05 billion, down 1.5% overall and 4.9% on a comparable store basis from fiscal year 2009.
Total store operating and general and administrative expenses for the fourth quarter were $168.2 million, an increase of $10 million from the fourth quarter last year. This increase was driven entirely by the extra week in fiscal 2010. For the full year, store operating and general and administration expenses were $634.6 million, an increase of $17.5 million or 2.8% from fiscal year 2009.
The company said it remains comfortable with its liquidity position given the $201 million in cash on hand and approximately $106 million in available capacity under its revolving credit facilities as of Sept. 30, 2010.