CST Brands' Financial Position 'Solid'
Bowers "pleased with the market's response" to new company
SAN ANTONIO -- CST Brands Inc., one of the largest independent retailers of motor fuels and convenience merchandise in North America, reported that its net income for first-quarter 2013 was $21 million, compared to $14 million for first-quarter 2012, within the range of $17 million to $23 million it announced in conjunction with its offering of senior notes in April.
For first-quarter 2013, its overall fuel gross margin increased $16 million, while its overall merchandise gross margin was up slightly when compared to first-quarter 2012, it said in its filing with the U.S. Securities & Exchange Commission (SEC).
San Antonio-based CST Brands was created as an independent company through a spinoff from Valero Energy Corp. on May 1, 2013. It serves more than 10 million customers every week, with nearly 1,900 locations in markets with growing populations in Texas, Louisiana, Arkansas, Oklahoma, New Mexico, Colorado, Wyoming, Arizona, California, Ontario, Quebec and the eastern Atlantic provinces of Canada.
"May 1, 2013, represented a new beginning for our company, and we are pleased with the market's response to CST," said Kim Bowers, CST Brands president and CEO. "Our focus on quality and service hasn't changed. We are still and always will be committed to providing great customer service, expanding our signature food offerings, maximizing profitability for shareholders and creating growth opportunities for our dedicated team members."
She said, "CST is a great company with close to 1,900 well-maintained, strong performing retail sites and a strong cash position. CST's financial position is solid. We'll review the second-quarter earnings report in our first earnings call later this summer."
As part of the company's new capital structure, CST Brands has $800 million in senior secured credit facilities, comprised of a $500 million term loan facility and a $300 million revolving credit facility, which remains undrawn at this time. The company also has $550 million aggregate principal amount of 5% senior unsecured bonds due 2023. The proceeds received from the issuance of this debt were not retained by CST Brands.
The company's cash position has improved by approximately $260 million related to new payment terms on motor fuel purchased from Valero. Combined with the revolving credit facility, the company has more than $500 million of immediate liquidity to fund its operational and growth expansion needs.
CST Brands has said that in 2013, it plans to build 15 new stores in the United States, It intends to continue to focus on building larger stores from the ground up with ample parking, colorful and spacious design and a variety of food options.
Bowers added, "The success of our business is a direct result of the efforts of our exceptional team members throughout our organization. They're excited to be a part of our new company and to pursue all the possibilities before us."
CST Brands' retail sites offer a broad array of convenience merchandise, beverages, snacks and fresh food. In the United States, CST Corner Stores sell Valero fuels and signature products such as Fresh Choices baked and packaged goods, U Force energy and sport drinks, Cibolo Mountain coffee, FC Soda and Flavors2Go fountain drinks. In Canada, CST Brands is the exclusive provider of Ultramar fuel and its Depanneur du Coin and Corner Stores sell signature Transit Cafe coffee and pastries.