The Pantry Breaking in New Board
Next quarter likely key to convenience store retailer's strategy adjustments
CARY, N.C. -- The Pantry CEO Dennis Hatchell said that he expects his new board of directors to address strategy changes to the company over the next quarter as the newly elected directors complete their immersion into the company. Meanwhile, it's "business as usual" and full speed ahead for the convenience store retailer's existing direction and strategies, he said.
"Three standing members left the board, three brand new members came on in addition to one member that we had nominated, Tad Dickson, so four of the eight members--myself being nine--are new to the board. Tad Dickson became chairman … [and] we're glad to have him leading the team," Hatchell recapped during the company's second-quarter fiscal 2014 earnings call today.
Earlier this year, the Cary, N.C.-based c-store company went through a protracted board of directors battle that culminated in an upset vote at the annual shareholders meeting.
Shareholders elected three newcomers to the board, overwhelmingly accepting the slate of three candidates put forward by "dissident" investment group Concerned Pantry Shareholders (CPS): Todd E. Diener, James C. Papas and Joshua E. Schechter.
In a surprising turn, shareholders voted out longtime chairman Edwin J. Holman, along with incumbents Thomas M. Murnane and Robert F. Bernstock.
The other elected directors are Thomas W. Dickson, Wifred A. Finnegan, Kathleen R. Guion, Dennis G. Hatchell, Terry L. McElroy and Mark D. Miles.
"What we've accomplished so far is we've gotten the group together, we've had orientation with them--we've had a chance to work together as a group to see what everybody's opinion was and how much change is going to be anticipated or what people might be looking to do going forward. And we've had our first board meeting," Hatchell said.
"All of that was successful; it went well," he continued. "The group has a lot of ideas, and I'm very encourage with how the whole thing come about. I'm very pleased with it."
But concerning any specific strategy changes, he said, "It's way too early to know. There's a lot to absorb by all of these new board members, and we're doing our best to bring them up to speed, and they're doing their best to bring them up to speed, so I think we'll be able [to talk about changes] over the next coming quarter. As for our plans right now, it's business as usual. We're proceeding with our plans--we think they're right; they're directionally correct, and we're going to stay [with] them until as a team, we either choose to change the strategy or stay with it."
He concluded, "The shareholders spoke … and with orientation completed, and one board meeting under our belt, we're embracing the energy and ideas they're going to bring and [we] look forward to working with them."
Acquisitions & Talent
Hatchell also discussed the possibility of acquiring stores. The comment comes in the wake of this week's announcement that Energy Transfer Partners (ETP), which controls the Sunoco retail brand, is acquiring Susser Holdings Corp. and its Susser Petroleum Partners LP, which owns the 630-unit Stripes c-store chain.
"Acquisitions, in a small way, we've been talking about those for a good bit," he said. "They are still in our plan, but it's not acquisitions like we're reading about lately--these big acquisitions that you're seeing in the newspaper. We're doing a market-by-market approach, and should there be a small group of stores, or even an individual store, that are where we'd like to be … for the share we have within a market, we would look to make those acquisitions. That's still in our plan going forward. But we don't have any plans for any large, major acquisitions."
Meanwhile, Hatchell announced the rounding out of the company's talent bench.
"Our management team is now complete, as we've announced the additions of Dave Zodikoff as our senior vice president of IT, and Gordon Schmidt as our senior vice president of operations and restaurants. Both of these guys are terrific talents, and we're looking forward to them being on the team and helping us attain our goals."
For details on The Pantry's earnings, see related story.
Based in Cary, N.C., The Pantry Inc. is a leading independently operated c-store chain in the southeastern United States and one of the largest independently operated c-store chains in the country. As of May 1, 2014, the company operated 1,534 stores in 13 states under select banners, including Kangaroo Express, its primary operating banner. The Pantry's stores offer a broad selection of merchandise, as well as fuel and other ancillary services.