Pantry Announces Q4 Results

“Our team continued to deliver strong store operating results aided by the 13% foodservice sales growth in comparable stores,” says The Pantry CEO.

The Pantry Inc. has announced financial results for its fiscal fourth quarter and year ended Sept. 27, 2012.

Q4 Details
The Pantry experienced a net loss of $4.8 million or $0.21 per share in the fourth quarter. This compares to net income of $3.3 million or $0.15 per diluted share in last year’s fourth quarter.

Excluding the impact of impairment charges and loss on extinguishment of debt, net loss for the fourth quarter of fiscal 2012 was $2.0 million or $0.09 per share, compared to earnings per share of $0.37 in the prior year. Adjusted EBITDA was $52.8 million, compared to $64.4 million a year ago.

Fuel gross profit was $44.0 million, compared to $64.4 million a year ago; retail fuel margin per gallon was $0.095 compared to $0.135 a year ago; comparable store fuel gallons sold decreased 2.6%. Comparable store merchandise revenue increased 3.3%; excluding cigarettes, comparable store merchandise revenue increased 6.1%.

Merchandise gross margin was 34.6%, compared to 33.8% a year ago. Store operating and general and administrative expenses were $153.7 million, compared to $157.7 million a year ago. Net cash provided by operating activities was $28.5 million, compared to $71.6 million a year ago.

Fiscal Year 2012
The company’s net loss for 2012 was $2.5 million or $0.11 per share. This compares to net income of $9.8 million or $0.44 per diluted share last year. Excluding the impact of impairment charges and loss on extinguishment of debt, net income for fiscal 2012 was $4.7 million or $0.21 per share, compared to earnings per share of $0.78 in the prior year. Adjusted EBITDA was $210.1 million, compared to $231.7 million in fiscal 2011.

Fuel gross profit was $210.3 million, compared to $257.1 million a year ago; retail fuel margin per gallon was $0.115 compared to $0.135 a year ago; comparable store fuel gallons sold decreased 3.1%. Comparable store merchandise revenue increased 3.3%; excluding cigarettes, comparable store merchandise revenue increased 5.9%. Meanwhile, merchandise gross margin was 33.7% compared to 33.9% in fiscal 2011.

Store operating and general and administrative expenses were $610.0 million, compared to $628.5 million a year ago. Net cash provided by operating activities was $144.0 million, compared to $178.7 million in fiscal 2011.

Long-term debt was $563.4 million as of Sept. 27, 2012, down $183.8 million since the end of fiscal 2011.

“We generated approximately $53 million of adjusted EBITDA during the fourth fiscal quarter of 2012, which was above the mid-range of our expectations,” said president and CEO Dennis Hatchell. “Our team continued to deliver strong store operating results aided by the 13% foodservice sales growth in comparable stores, which helped offset the challenging fuel cost environment.”

“For fiscal 2012, our comparable store merchandise sales were up 3.3%, up 5.9% excluding cigarettes, and we achieved our objective of bringing our fuel gallon volume more in line with industry trends,” Hatchell continued. “We are pleased to have completed a successful refinancing in August and to have reduced debt $184 million in fiscal 2012. As a result of the refinancing, we have addressed all of the company’s significant near term debt maturities. We are also excited that Joe Venezia has joined us as senior vice president of operations to focus on growing sales and improving store operations.”

The company believes its liquidity position will allow it to continue to execute its core strategic initiatives given the $89.2 million in cash on hand and $116.6 million in available capacity under its revolving credit facilities as of Sept. 27, 2012.

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