Susser Petroleum Partners LP (SUSP), a wholesale distributor of motor fuels, today reported financial and operating results for the second quarter ended June 30, 2013.
Net income for the quarter was $9.7 million, or $0.44 per unit. Adjusted EBITDA totaled $12.8 million, and distributable cash flow was $11.9 million. Total revenue for the quarter was $1,118.1 million.
“We are pleased to announce the first increase in our quarterly distribution rate since our IPO,” said Sam Susser, chairman and CEO. “Even with the increase, our distribution coverage for the quarter was a very healthy 1.2 times. We anticipate continued growth in fuel volumes and rental income for the foreseeable future, which should position us for additional distribution increases in the future.”
Revenue for the second quarter totaled $1,118.1 million, a 2.8% increase compared to $1,087.6 million (pro forma) in the comparable period of 2012. The increase was driven by a 5.4% increase in gallons sold, partially offset by a decline in the selling price per gallon. In the second quarter of 2013, 67.2% of revenues were generated from motor fuel sales to affiliates, 32.5% were from motor fuel sales to other third parties, and 0.3% came from rental and other income.
Gross profit for the quarter totaled $17.0 million, a 20.7% increase compared to pro forma gross profit of $14.0 million in the second quarter of 2012. On a weighted average basis, fuel margin for all gallons sold increased to 3.6% per gallon in the second quarter of 2013 compared to a pro forma 3.4 cents per gallon in the prior-year period.
Affiliate customers as of June 30, 2013 include 567 Stripes convenience stores operated by parent company, Susser Holdings Corp., as well as SUSS’ sales of motor fuel under consignment arrangements at approximately 90 independently operated convenience stores. Motor fuel gallons sold to affiliates during the second quarter increased 8.0% versus the prior-year period to 264.1 million gallons. Gross profit on these gallons totaled $7.9 million, or 3.0 cents per gallon, versus a pro forma $7.3 million in the comparable three-month period last year, or 3.0 cents per gallon.
Third-party customers of SUSP include approximately 488 independent dealers under long-term fuel supply agreements and approximately 1,800 other commercial customers as of June 30, 2013. Total gallons of motor fuel sold to third parties increased year-over-year by 0.3%, to 124.9 million gallons, for the quarter. Gross profit on these gallons was $6.1 million, or 4.9 cents per gallon, compared to $5.2 million, or 4.2 cents per gallon, in the prior-year period on a pro forma basis.
YTD 2013 Compared to Pro Forma YTD 2012
Revenue for the first six months of 2013 totaled $2,199.3 million, a 1.6% increase compared to pro forma revenue of $2,164.1 million in the first half of 2012. Gross profit for the period totaled $32.5 million, an 18% increase compared to pro forma gross profit of $27.6 million in the prior-year period.
Total gallons of motor fuel sold to affiliates and to third parties increased year-over-year by 6.9% and 0.9%, to 515.2 million gallons and 240.8 million gallons, respectively, for the first half.
On a weighted average basis, fuel margin for all gallons sold increased to 3.6 cents per gallon in the first six months of 2013 from 3.4 cents per gallon pro forma in the comparable period of 2012.
Capital Spending and Financing
SUSP completed purchase and leaseback transactions for six Stripes convenience stores during the second quarter for $21.2 million and two more so far in the third quarter for $6.7 million. Since its initial public offering in September 2012, SUSP has completed the purchase and leaseback of 22 Stripes stores for a cumulative cost of $89.7 million, including post-completion true-up.
Including the Stripes store purchases, SUSP’s gross capital expenditures for the second quarter were $30.0 million, which included $0.2 million for maintenance capital. At June 30, SUSP had borrowings against its revolving line of credit of $84.8 million and other long-term debt of $97.0 million, a portion of which was collateralized by $95.9 million of marketable securities.