CST Brands in 'Network Optimization' Mode
Corner Store retailer selling 100 locations that don't fit core strategy
Motor fuel revenues in the U.S. segment declined $110 million, driven by a 1% decline in motor fuel gallons sold and a 6% decline in the company's per gallon average motor fuel selling price. U.S. motor fuel gross margin (cents per gallon), after deducting credit-card fees, was 15 cents, compared to 21 cents in fourth-quarter 2012. The company experienced historically strong U.S. motor fuel gross margins in fourth-quarter 2012, due primarily to the volatility of wholesale gasoline prices during that period. U.S. merchandise gross margin, net of credit-card fees, increased from 28.9% for fourth-quarter 2012 to 30.5% for the same period in 2013 due primarily to an increase in foodservice and packaged beverages.
Operating income was $60 million for fourth-quarter 2013, compared to $91 million for fourth-quarter 2012. Adjusted EBITDA was $93 million for the quarter, compared to $123 million for the same period in 2012.
Net income for the year ended Dec. 31, 2013 was $139 million. For the same period in 2012, net income was $208 million. Revenues were approximately $12.8 billion, compared to $13.1 billion for 2012.
U.S. motor fuel revenues declined $186 million, driven by a 3% decline in the company's per-gallon average motor fuel selling price.
Operating income was $238 million for 2013, compared to $313 million for 2012. Adjusted EBITDA was $366 million for 2013, compared to $429 million for 2012. The primary reason for the decline in both operating income and adjusted EBITDA was a decrease in motor fuel gross margin in both the company's U.S. and Canada retail segments. The company also had an increase of $13 million of operating expenses related to new store growth along with an increase of $17 million of general and administrative expenses primarily associated with being a new public company.
"As you compare our 2013 results to 2012, keep in mind that we took on additional costs as we established ourselves as an independent, publicly traded company," said Bowers. "The company also launched several new initiatives, built more stores than ever before and began programs to further maximize gross profit capture of the available fuel margin. In 2012, we experienced a historical high fuel volume and margin environment that was not repeated in 2013."
She continued, "Central to our success is our commitment to continue focusing on operational excellence both inside and outside of the store. We will construct more new stores this coming year, expand our signature food offerings and develop new growth opportunities. Soon we will be completing our first year as CST, and we look forward to 2014 and building on our significant 2013 accomplishments."
CST Brands is one of the largest independent retailers of motor fuels and convenience merchandise in North America. Based in San Antonio, Texas, CST employs nearly 12,000 Team Members at approximately 1,900 locations throughout the Southwestern United States and Eastern Canada offering 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 is the exclusive provider of Ultramar fuel and its Depanneur du Coin and Corner Stores sell signature Transit Cafe coffee and pastries.