Strong Foodservice Business Helped The Pantry in 1Q Fiscal 2013
Reports $3.1 million loss, but adjusted EBITDA, same-store merchandise revenue, margin rose
CARY, N.C. -- For its fiscal first quarter ended Dec. 27, 2012, The Pantry Inc. reported a net loss of $3.1 million or 14 cent per share, compared to a net loss of $2.9 million or 13 cents per share in last year's first quarter.
Fuel gross profit was $49.2 million, compared to $55.9 million a year ago; retail fuel margin per gallon was 11.4 cents compared to 12.2 cents a year ago; comparable-store fuel gallons sold decreased 4.8%.
Comparable-store merchandise revenue increased 2.2%; excluding cigarettes, comparable-store merchandise revenue increased 4.6%. Merchandise gross margin was 34.3%, compared to 33.2% a year ago.
"Our foodservice business experienced another strong quarter as evidenced by an increasing mix of 10.8% from 10.5% in the same period a year ago. Total comparable-store foodservice sales grew 4.2% which includes 8.6% improvement in proprietary foodservice," Berry Epley, vice president and corporate controller, said during the company's earnings call.
"Our overall merchandise gross margin rate [was] a 110-basis-point increase as compared to the prior year, primarily driven by the expense beverage and other proprietary foodservice.
Store operating and general and administrative expenses were $147.2 million, compared to $154.4 million a year ago.
Net cash provided by operating activities was $17 million, an increase of $10.3 million over the prior year quarter.
The company said it believes its liquidity position will allow it to continue to execute its core strategic initiatives given the $24.4 million in cash on hand and $129.9 million in available capacity under its revolving credit facilities as of Dec. 27, 2012.
Adjusted EBITDA increased $5.1 million to $48.9 million, compared to $43.8 million a year ago.
"We improved adjusted EBITDA to $49 million in the first fiscal quarter of 2013, which is an increase of 12% from the same quarter a year ago," president and CEO Dennis G. Hatchell said. "This improvement over the prior year quarter is a reflection of our team's continued focus on improving merchandise sales and margins and controlling expenses. This was achieved despite lower fuel volume and margins compared to the same period a year ago."
During the first quarter, the chain closed the doors on six stores and ended up the quarter with 1,572 company-operated locations, 217 quick-service restaurants (QSRs) and 71 wholesale fuel locations.
During the call, Hatchell teased the company's new "lifestyle" merchandising program and praised the company's new CFO. "We are also excited to have Clyde Preslar joining our team as senior vice president and chief financial officer," he said. "Clyde's 15 years of experience as a public company CFO and his work in the consumer goods space make him a great fit for the Pantry, and we are convinced that he will make significant contributions to the Pantry realizing its strategic initiatives."
Based in Cary, N.C., The Pantry Inc. is a leading independently operated convenience store chain in the southeastern United States and one of the largest independently operated convenience store chains in the country. The company operates approximately 1,575 stores in 13 states under select banners, including Kangaroo Express, its primary operating banner.