SANFORD, N.C. -- The Pantry Inc. has announced financial results for its second fiscal quarter ended March 31, 2005. Revenues for the second quarter totaled $945.8 million, a 20.3% increase from $786.4 million in the corresponding period a year ago. Net income for the quarter was $3.8 million, or 18 cents per diluted share, compared with a net loss on a GAAP basis of $14.1 million, or 71 cents per share, in last year's second quarter.
Results for the year-ago period included 72 cents per share in early debt extinguishment costs, as well as 2 cents per [image-nocss] share in expenses related to a secondary stock offering. Also, there was duplicate interest expense of 5 cents per share on two issues of senior subordinated notes for a one-month period when both were outstanding. Net income excluding these financing-related items for second-quarter fiscal 2004 was $1.6 million, or 8 cents per share; net income and earnings per share in the fiscal 2005 period were more than double the adjusted results for the year-ago quarter.
President and CEO Peter J. Sodini said, We are pleased to report record earnings and comparable-store volumes above our expectations for this seasonally weak period, which were achieved despite the dramatic escalation in gasoline costs during the quarter. Operating momentum in our core stores has continued to acceleratein terms of both merchandise sales and gasoline gallons sold in comparable stores. We believe this reflects the impact of our store conversion and rebranding programs, as well as our continued focus on expanding higher-margin merchandise categories such as private-label products and foodservice. In addition, our earnings continue to benefit from a reduction in interest expense following last year's debt refinancing.
Merchandise revenue for the quarter was up 6.6% on a comparable store basis. The merchandise gross margin of 37.2% increased 40 basis points from a year ago. Total merchandise gross profits rose 6.3% to $105.7 million, and accounted for approximately 76% of the company's total gross profits. Comparable store gasoline gallons increased 7.7% from a year ago.
Gasoline revenues were up 28.1%, partly due to a 19.4% increase in the average retail price per gallon, to $1.91. The gross margin per gallon was 9.9 cents, compared with 10.5 cents in last year's second quarter. Excluding the impact of the increase in credit card fees, gasoline margins per gallon were flat from a year ago. Gasoline gross profits for the quarter totaled $34.1 million, up 1.1% from a year ago.
During the quarter, the company announced the acquisition of D & D Oil Co. Inc., which operated 53 Cowboys convenience stores, with two additional stores under construction and seven potential development sites. Located mostly in Georgia and Alabama, the Cowboys chain generated approximately $320 million in revenue in 2004. The acquisition closed on April 21, 2005, and is expected to be immediately accretive to the Company's earnings per share.
Successfully negotiating the Cowboys acquisition was clearly the strategic highlight of our second fiscal quarter, Sodini said. The transaction complements our existing store base in the Southeast extremely well, and provides us with many attractive, newer locations that generate high average volumes in both gasoline and merchandise.
Also during the quarter, the company completed gasoline and merchandise brand conversions or image upgrades at an additional 126 stores. That brought the total completed as of March 31, 2005, to 860 stores out of about 1,100 stores targeted for conversion or reimaging under one of three gasoline brandsBP/Amoco, CITGO or the company's own Kangaroo private-label brand. All of these stores' merchandise operations are also being remodeled and rebranded under the Kangaroo Express banner.
For the first six months of fiscal 2005, net income was $15.9 million, or 75 cents per diluted share, compared with a net loss of $9.1 million, or 48 cents per share, in the first half of fiscal 2004. Results for the year-ago period included the financing related expenses described above, as well as an additional 2 cents per share incurred in the first quarter of that year. Excluding these items, net income for the first half of fiscal 2004 was $6.9 million, or 36 cents per share, and earnings for the first six months of the current year were more than double the year-earlier results. EBITDA for the first half of fiscal 2005 was $73.1 million, a 15.8% increase from a year ago.
Sodini concluded, Given our strong first-half results and the recent addition of the high-volume Cowboys stores, we now believe our earnings per share for fiscal 2005 are likely to fall in a range between $2.05 and $2.15, above our previous expectations. Longer term, The Pantry remains well-positioned to capitalize on its leading market positions across the Southeast, with solid momentum in our core operations and the financial resources to continue growing through strategic acquisitions.
Headquartered in Sanford, N.C., The Pantry, with net sales for fiscal 2004 of approximately $3.5 billion, operates 1,345 stores in 10 states under the Kangaroo Express, The Pantry, Golden Gallon and Lil Champ Food Store names.
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