'Great Strides' for CST Brands
Company delivers "strong year-over-year earnings growth"
SAN ANTONIO -- CST Brands Inc., one of the largest independent retailers of motor fuels and convenience merchandise in North America, continues "to make great strides as a separate, publicly traded company" after its spinoff from Valero Energy Corp., said Kim Bowers, chairman and CEO.
The San Antonio-based company has reported financial results for third-quarter 2013. For the three-month period ending Sept. 30, 2013, it reported net income of $41 million. It reported net income of $24 million for the comparable period in 2012 (see related story on CSPnet.com and in CSP Daily News for a report on CST Brands' strategy).
"Our company delivered strong year-over-year earnings growth," said Bowers.
"We … [are] working on key initiatives such as establishing our culture, further developing our brand, and reducing and eliminating the transition services being provided by our former parent company," she added. "I am very proud of our hardworking team members across the company that helped produce a very solid quarter."
Revenues totaled $3.3 billion for third-quarter 2013 compared to $3.4 billion for the same period of 2012. Motor fuel revenues in the U.S. segment declined $47 million, driven by a 1% decline in both of the company's per-gallon average motor fuel selling price and in motor fuel gallons sold.
In the United States, motor fuel gross margin (cents per gallon), after deducting credit-card fees, was 16 cents, compared to nine cents in third-quarter 2012. The company experienced historically low motor fuel gross margins in third-quarter 2012, due primarily to the volatility of crude oil during that period. U.S. merchandise gross margin, net of credit-card fees, increased slightly when compared to third-quarter 2012.
Operating income was $68 million for third-quarter 2013 compared to $35 million for third-quarter 2012. Adjusted was $101 million for the three-month period ending Sept. 30, 2013, compared to $63 million for the same period in 2012. The increase in operating income and adjusted EBITDA was due primarily to higher motor fuel gross margin.
Net income for the nine months ending Sept. 30, 2013, was $105 million. For the same period in 2012, net income was $146 million.
For the nine month period ending Sept. 30, 2013, revenues were approximately $9.7 billion compared to $9.9 billion for the nine-month period ending Sept. 30, 2012. Motor fuel revenues in the U.S. segment declined $76 million, driven by a 2% decline in the company's per-gallon average motor fuel selling price.
Operating income was $178 million for the nine months in 2013 compared to $218 million for the nine months in 2012. Adjusted EBITDA was $273 million for the nine month period ending September 30, 2013 compared to $302 million for the same period in 2012. The reasons for the decline in that nine-month period (versus increases seen in third-quarter numbers) were a decline in motor fuel gross margin in both its U.S. and Canada retail segments, as well as an additional $12 million of general and administrative expenses primarily associated with being a new public company.
Officials noted a continuing administrative focus in the coming months on its IT efforts.
CST Brands is a convenience store retailer with 1,900 locations in the United States and Canada and $13 billion in revenues. It is one of the largest independent retailers of motor fuels and convenience merchandise in North America, operating throughout the southwestern United States and eastern Canada offering an 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.