Company News

The Pantry Chalks Up Volatile Year for Fuels

But same-store sales rose more than 3%, company says; discusses management changes

CARY, N.C. -- The Pantry Inc. said same-store sales rose by 3.3% during its fiscal 2012, compared to 0.2% in fiscal 2011, according to company performance highlights reported in a proxy statement filed Wednesday with the U.S. Securities & Exchange Commission (SEC).

General and administrative expenses were reduced to $610 million in fiscal 2012 from $628.5 million in fiscal 2011, it added.

"We are pleased with our inside comparable-store sales growth and the reduction we made in expenses," the company said in the notice of the annual meeting of stockholders to be held March 14, 2013.

"The year was a volatile one for our fuels business, and despite the successes ... our fuel gross margin significantly impacted the bottom line results of the company. Our fuel gross profit was $210.3 million, compared to $257.1 million in fiscal 2011, and our adjusted EBITDA was $210.1 million, compared to $231.7 million in fiscal 2011," it said.

Along with registering the names of the directors up for election, the filing also discussed the company's recent management changes. Terry Marks unexpectedly resigned from his position as president and CEO on Oct. 5, 2011. "Marks departure created significant uncertainty for the senior management team," the company said.

In addition to the CEO vacancy, the company had been recruiting for a senior vice president of operations to replace another departed executive, Brad Williams. The Compensation & Organization Committee believed it was in the best interest of the company and stockholders to take action to stabilize the senior management team, so it approved retention awards in the form of time-based restricted stock to certain executives in order to encourage members of the senior management team to remain with the company.

Based in Cary, N.C., The Pantry is a leading independently operated convenience store chain in the southeastern United States and one of the largest independently operated c-store chains in the country. As of Jan. 3, the company operated 1,572 stores in 13 states under select banners, including Kangaroo Express, its primary operating banner.

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