Exhibit 99.1
SUSSER HOLDINGS REPORTS 4TH QUARTER, FULL YEAR RESULTS
MERCHANDISE SALES UP 9.9% FOR THE QUARTER, 10.9% FOR THE FULL YEAR
CORPUS CHRISTI, Texas, March 19 /PRNewswire-FirstCall/ -- Susser Holdings
Corporation (Nasdaq: SUSS) today reported fourth quarter 2006 merchandise sales
and total revenues of $88.7 million and $488.0 million, compared with
merchandise sales and total revenues of $80.7 million and $509.1 million in the
same quarter of 2005. The decline in total revenues for the quarter was
primarily related to lower retail and wholesale fuel prices as compared to the
fourth quarter of 2005. Adjusted EBITDA(1) for the fourth quarter was $5.9
million, versus $13.8 million reported and $11.1 million pro forma(2) in the
prior year's fourth quarter. Adjusted EBITDA(1) for the fourth quarter of 2006
was negatively impacted by an $8.5 million decline in fuel gross profit and
positively impacted by an 11.2 percent increase -- or $3.5 million -- in
non-fuel gross profit, compared to the fourth quarter of 2005.
On a reported basis -- which reflects the fact that Susser operated under
its prior LLC structure for a portion of the fourth quarter before completing
its initial public offering on October 24, 2006 -- the Company reported a
pre-tax loss of $10.9 million in the quarter, compared with a pre-tax loss of
$31.1 million in the fourth quarter of 2005. Reported net results in both
periods were affected by non-recurring charges of $7.1 million in 2006 related
to the redemption of $50 million of senior notes in November 2006 and $33.4
million in 2005 related to the Company's December 2005 recapitalization.
After-tax net loss for the quarter was $10.9 million, or $(0.72) per diluted
share. The Company's fourth quarter tax provision consists of a $9.7 million tax
benefit, of which $7.4 million reflects the initial net tax benefit of its
deferred tax positions upon conversion from a limited liability company to a
taxable corporation on October 24, reduced by a $9.7 million tax valuation
allowance.
To show a more meaningful comparison of results under its new capital
structure, Susser is providing pro forma results for 2005 and 2006 to reflect
the impact of the October 2006 IPO as well as changes Susser made in its capital
structure in December 2005. On a pro forma(2) basis, the Company reported an
after-tax loss for the fourth quarter of 2006 of $1.8 million, or $(0.11) per
diluted share, versus an after-tax loss of $10.2 million, or $(0.61) per diluted
share, for the fourth quarter of 2005. Pro forma(2) revenues for both periods
were the same as reported revenues.
For the full year 2006, Susser reported that its merchandise sales increased
by 10.9 percent to $365.3 million, and total revenues increased by 19.5 percent
to $2.3 billion. Pro forma(2) adjusted EBITDA(1) increased by 6.9 percent to
$45.2 million. On a reported basis, the Company had a pre-tax loss of $3.7
million in 2006, versus a pre-tax loss of $20.6 million in 2005. Reported net
results in both periods were affected by the non-recurring charges described
above. After-tax net loss for the year was $3.7 million, or $(0.35) per diluted
share. Pro forma(2) net income for the year was $5.9 million, or $0.35 per
diluted share, versus a net loss of $7.8 million, or $(0.47) per diluted share,
a year ago.
"We continued to see strong year-over-year growth in merchandise sales and
merchandise gross margins during the fourth quarter, and we are especially
pleased with the continued growth of our Laredo Taco Company restaurant
business," said Sam L. Susser, Susser Holdings Chief Executive Officer.
"As expected, fuel margins declined from the record high levels we saw in
the third quarter of 2006, although we still achieved full year fuel margins
that were slightly ahead of last year's and consistent with our long-term
average," he said. "Wholesale volumes were also impacted somewhat by the sale in
June 2006 of 25 unattended wholesale fueling stations.
"Overall, we're very pleased with our fourth quarter and full year results,
and we continue to expect strong operating performance in 2007. We expect EBITDA
percentage growth in the mid teens range this year. With the December 2005
recapitalization, the October 2006 IPO, the re-branding to Stripes and the
conversion to Valero now behind us, our management team looks forward to
focusing its time and energy on growth initiatives going forward," Susser said.
Recent Developments
New C Stores/Wholesale Dealer Sites -- Susser continues to expand and
upgrade its store locations. For the full year 2006, 16 new retail locations
were opened, and nine small or lower-volume stores were closed, bringing the
total store count at year-end to 325. Susser expects to open two additional
stores in the first quarter of 2007 and currently has seven units under
construction. An estimated 18 to 22 new retail stores are planned for all of
2007, and substantially all of these stores are expected to include a Laredo
Taco Company restaurant. In its wholesale operations, the Company added 30 new
dealer sites and discontinued nine, for a total of 367 dealer sites in operation
at year-end. For the first quarter, it expects to add seven to eight new dealer
sites, and 25 to 35 for all of 2007.
C Store/Retail Fuel Re-branding -- The re-branding of Susser's convenience
stores from Circle K to Susser's own proprietary Stripes brand name and its
retail fuel supply brand switch from CITGO to Valero was completed during the
first quarter.
New Advertising Campaign -- Susser will continue its Stripes re-branding
initiative with an advertising campaign that is rolling out this month in Corpus
Christi, Laredo and the Rio Grande Valley. The campaign includes television,
radio and billboard advertising promoting Stripes and Laredo Taco Company as the
ideal spot for fresh, delicious food and refreshments when the urge hits.
Exchange Offer -- The Company completed an exchange offer on January 24,
2007, for its $120 million 10-5/8% Senior Notes due 2013. The notes were
exchanged for registered notes with identical terms in all material respects.
The Company had previously redeemed $50 million of the notes with IPO proceeds
on November 24, 2006.
Fourth Quarter Financial Highlights
Merchandise sales from Susser's retail convenience stores increased by 9.9
percent overall to $88.7 million and by 6.5 percent on a same-store basis during
the fourth quarter of 2006, driven by strong growth in sales from Laredo Taco
Company restaurant operations, along with beer, packaged beverage and snack
sales. Merchandise margin was 32.2 percent -- up slightly from 31.8 percent
versus the fourth quarter of 2005. Total merchandise gross profit increased 11.3
percent to $28.6 million.
Retail convenience store fuel volumes increased 0.6 percent to 94.8 million
gallons for the quarter, and average volumes sold per store for the quarter
decreased 0.37 percent to 296,465 gallons. Retail gross margin was 9.2 cents per
gallon, versus 14.8 cents per gallon in the fourth quarter of 2005 and 21.0
cents per gallon in the third quarter of 2006. Retail fuel gross profit declined
by 37.5 percent to $8.7 million primarily due to the lower per-gallon margins.
Wholesale fuel volumes sold to Susser's 367 dealer and other third-party
customers declined 4.1 percent to 110.4 million gallons in the quarter,
primarily reflecting the sale in June 2006 of 25 unattended fueling stations.
Wholesale fuel gross margin was 4.5 cents per gallon, versus 7.2 cents per
gallon a year ago, and gross profit decreased 40 percent to $5.0 million.
Adjusted EBITDA(1) was $5.9 million, versus $13.8 million reported and $11.1
million pro forma(2) in the fourth quarter of 2005. Adjusted EBITDA(1) for the
fourth quarter of 2006 was impacted primarily by lower fuel margins, along with
$3.1 million of additional rent expense related to the December 2005
sale/leaseback transaction.
Full-Year Highlights
For the full year ended December 31, 2006, merchandise sales from Susser's
retail convenience stores increased by 10.9 percent overall to $365.3 million
and by 6.1 percent on a same-store basis, compared with 2005. Merchandise margin
for the year was 32.6 percent, versus 32.3 percent in the prior year, and
merchandise gross profit was $119.1 million, up 11.9 percent from 2005.
Retail convenience store gasoline volumes increased 7.4 percent to 395.3
million gallons for the year, and average volumes sold per store increased 4.8
percent to 1.24 million gallons. Retail gross margin was 13.64 cents per gallon
for the year, versus 13.57 cents per gallon in 2005. Retail fuel gross profit
increased by 8 percent to $53.9 million. After credit card expenses, however,
which increased by $3.4 million, or 0.72 cents per gallon, fuel margin per
gallon was slightly lower than last year, but still consistent with the
five-year average.
Wholesale fuel volumes increased 2.1 percent to 451 million gallons for the
year. Wholesale fuel gross margin was 5.55 cents per gallon, versus 5.50 cents
per gallon for 2005, and fuel gross profit increased 3 percent to $25.0 million.
Adjusted EBITDA(1) for the full year was $45.2 million, versus $54.4 million
reported and $42.3 million pro forma(2) for the full year 2005. Pro forma(2)
adjusted EBITDA(1) for 2006 was higher as a result of strong merchandise sales
and margins, along with increased fuel volumes and margins.
Recap of Key Profitability Measures
(dollars in millions, except per share amounts)
Full Year Full Year
Q4 2005 Q4 2006 2005 2006
------------ ------------ ------------ ------------
Adjusted EBITDA(1) $ 13.8 $ 5.9 $ 54.4 $ 45.2
Pro Forma(2) Adjusted EBITDA(1) $ 11.1 $ 5.9 $ 42.3 $ 45.2
Pre-tax Net Income $ (31.1) $ (10.9) $ (20.6) $ (3.7)
Pro Forma(2) Net Income $ (10.2) $ (1.8) $ (7.8) $ 5.9
Pro Forma(2) Diluted EPS $ (0.61) $ (0.11) $ (0.47) $ 0.35
Guidance Update
The Company is modifying its 2007 guidance range for retail per-store fuel
volume growth and its wholesale fuel margins. Actual 3- and 12-month 2006
results and estimates for 2007 for key operating metrics are as follows:
3 Months 12 Months Estimates
Ended Ended For
12/31/06 12/31/06 2007
------------- ------------- -------------
Merchandise Same-Store Sales Growth 6.5 % 6.1 % 4-5%
Merchandise Margins 32.2 % 32.6 % 31-33%
Retail Average Per-Store Gallons
Growth (3.7)% 4.8 % 2-6 %*
Retail Fuel Margins 9.2 CPG 13.6 CPG 12-15 CPG
Wholesale Fuel Margins 4.5 CPG 5.5 CPG 4.0-5.5 CPG**
New Retail Stores+ 8 16 18-22
New Wholesale Dealer Sites+ 4 30 25-35
+ Does not reflect store closures.
* Updated from earlier range of 5% - 8% growth.
** Updated from earlier range of 4.5 cents - 5.5 cents per gallon margin.
Investor Conference Call and Webcast
Susser's management team will hold a conference call on Monday, March 19,
2007, at 11 a.m. ET (10 a.m. CT) to discuss fourth quarter and full year
results. To participate in the call, dial (303) 262-2125 at least 10 minutes
before the call begins and ask for the Susser conference call. A replay will be
available approximately two hours after the call ends and will be accessible
through March 26. To access the replay, dial (303) 590-3000 and enter the pass
code 11086483#.
The conference call will also be accessible via Susser's Web site at
www.susser.com. To listen to the live call, please visit the Investor Relations
page of Susser's Web site at least 10 minutes early to register and download any
necessary audio software. An archive will be available on the Web shortly after
the call.
(1) Adjusted EBITDA is a non-GAAP financial measure of performance and
liquidity that has limitations and should not be considered as a
substitute for net income or cash provided by (used in) operating
activities. Please refer to the discussion and tables under
"Reconciliations of Non-GAAP Measures" at the end of this news release
for a discussion of our use of adjusted EBITDA and a reconciliation to
net income and cash provided by operating activities for the periods
presented.
(2) Pro forma numbers are adjusted to show results as if the 2006 IPO as
well as the December 2005 recapitalization, sale/leaseback transaction
and senior notes issuance had occurred on Jan. 1, 2005. The pro forma
numbers do not adjust for a non-recurring $17.3 million compensation
charge related to the December 2005 recapitalization. See the Pro Forma
Condensed Consolidated Statements of Operations in this earnings
release. These transactions are also more fully described in Footnote 3
of the Company's 2006 third quarter Form 10-Q and in the Company's
registration statement on Form S-1.
About Susser Holdings Corporation
Corpus Christi, Texas-based Susser Holdings Corporation is a third
generation family led business that operates 325 convenience stores in Texas and
Oklahoma under the Stripes banner and supplies branded motor fuel to 367
independent dealers through its wholesale fuel division. Susser owns and
operates 146 Laredo Taco Company restaurants inside the Stripes convenience
stores that feature authentic "made from scratch" Mexican food.
Forward-Looking Statements
This news release contains "forward-looking statements" describing Susser's
objectives, targets, plans, strategies, costs, anticipated capital expenditures,
expected cost savings, costs of our store re-branding initiatives, expansion of
our food service offerings, potential acquisitions and new store openings and
dealer locations. These statements are based on current plans and expectations
and involve a number of risks and uncertainties that could cause actual results
and events to vary materially, including but not limited to: competition from
other convenience stores, gasoline stations, supermarkets, hypermarkets and
other wholesale fuel distributors; changes in economic conditions; volatility in
energy prices; political conditions in key crude oil producing regions;
wholesale cost increases of tobacco products; adverse publicity concerning food
quality, food safety or other health concerns related to our restaurant
facilities; consumer behavior, travel and tourism trends; devaluation of the
Mexican peso or restrictions on access of Mexican citizens to the U.S.;
unfavorable weather conditions; changes in state and federal regulations;
dependence on one principal supplier for merchandise, two principal suppliers
for gasoline and one principal provider for transportation of substantially all
of our motor fuel; financial leverage and debt covenants; changes in debt
ratings; inability to identify, acquire and integrate new stores; dependence on
senior management; acts of war and terrorism; and other unforeseen factors. For
a full discussion of these and other risks and uncertainties, refer to the "Risk
Factors" section of the Company's registration statement on Form S-1 (File No.
333-134033), as amended. These forward-looking statements are based on and
include our estimates as of the date hereof. Subsequent events and market
developments could cause our estimates to change. While we may elect to update
these forward-looking statements at some point in the future, we specifically
disclaim any obligation to do so, even if new information becomes available,
except as may be required by applicable law.
Susser Holdings Corporation
Consolidated Statements of Operations
(unaudited)
Three Months Ended Year Ended
------------------------------- -------------------------------
Jan. 1, 2006 Dec. 31, 2006 Jan. 1, 2006 Dec. 31, 2006
-------------- -------------- -------------- --------------
(in thousands)
Revenues:
Merchandise sales $ 80,720 $ 88,690 $ 329,530 $ 365,343
Motor fuel sales 422,857 393,104 1,545,200 1,876,641
Other income 5,508 6,169 21,534 23,552
-------------- -------------- -------------- --------------
Total revenues 509,085 487,963 1,896,264 2,265,536
Cost of sales:
Merchandise 55,053 60,121 223,080 246,251
Motor fuel 400,639 379,415 1,470,992 1,797,709
Other 235 327 617 798
-------------- -------------- -------------- --------------
Total cost of sales 455,927 439,863 1,694,689 2,044,758
-------------- -------------- -------------- --------------
Gross profit 53,158 48,100 201,575 220,778
Operating expenses:
Personnel 15,736 17,542 62,237 69,288
General and administrative 22,080 4,842 36,610 19,377
Operating 15,093 13,540 53,602 61,953
Rent 2,919 6,043 9,739 22,694
Royalties 829 727 3,396 3,574
Loss (gain) on disposal of
assets and impairment charge (212) 277 (641) -
Depreciation, amortization,
and accretion 10,501 7,699 30,205 25,371
-------------- -------------- -------------- --------------
Total operating expenses 66,946 50,670 195,148 202,257
-------------- -------------- -------------- --------------
Income (loss) from
operations (13,788) (2,570) 6,427 18,521
Other income (expense):
Net interest expense (7,338) (8,522) (18,135) (22,610)
Other miscellaneous (10,007) 235 (8,858) 452
-------------- -------------- -------------- --------------
Total other income
(expense) (17,345) (8,287) (26,993) (22,158)
Minority interest in income
of consolidated
subsidiaries (16) (14) (76) (61)
-------------- -------------- -------------- --------------
Income (loss) before income
taxes (31,149) (10,871) (20,642) (3,698)
============== ============== ============== ==============
Income tax expense - (48) - (48)
Net income (loss) $ (31,149) $ (10,919) $ (20,642) $ (3,746)
============== ============== ============== ==============
Earnings per common share:
Basic (a) $ (0.72) (a) $ (0.35)
Diluted (a) $ (0.72) (a) $ (0.35)
Weighted average shares
outstanding:
Basic 15,226,833 10,729,511
Diluted 15,226,833 10,729,511
(a) Due to the significantly different capital structure prior to December 21,
2005, comparative EPS data prior to 2006 is not meaningful.
SUSSER HOLDINGS CORPORATION
CONSOLIDATED BALANCE SHEETS
(unaudited)
Jan. 1, Dec. 31,
2006 2006
------------ ------------
(in thousands)
Assets
Current assets:
Cash and cash equivalents $ 4,116 $ 32,938
Accounts receivable, net of allowance
for doubtful accounts of $0 at
January 1, 2006, and $1,231 at
December 31, 2006 44,173 44,084
Inventories, net 37,278 37,296
Assets held for sale 5,439 518
Other current assets 3,126 1,884
------------ ------------
Total current assets 94,132 116,720
Property and equipment, net 224,226 232,454
Other assets:
Goodwill - 44,762
Intangible assets, net 38,211 17,492
Other noncurrent assets 4,565 10,899
------------ ------------
Total other assets 42,776 73,153
------------ ------------
Total assets $ 361,134 $ 422,327
============ ============
Liabilities and shareholders' equity
Current liabilities:
Accounts payable $ 56,632 $ 71,680
Accrued expenses and other current
liabilities 33,910 33,869
------------ ------------
Total current liabilities 90,542 105,549
Long-term debt 170,000 120,000
Revolving line of credit 6,220 --
Deferred gain, long-term portion 28,417 27,060
Other noncurrent liabilities 7,796 7,918
------------ ------------
Total long-term liabilities 212,433 154,978
Minority interests in consolidated subsidiaries 578 630
Commitments and contingencies
Members' interests and shareholders' equity:
Common units (Stripes), no par value,
15,914,639 units authorized,
12,849,660 issued and outstanding as of
January 1, 2006; 0 units
outstanding as of December 31, 2006 - -
Common stock (Company), $.01 par value, 0
shares outstanding as of January 1, 2006;
125,000,000 shares authorized, 16,824,162
issued and outstanding as of
December 31, 2006 - 168
Additional paid-in capital 59,231 166,398
Retained earnings (deficit) (1,650) (5,396)
------------ ------------
Total members' interests and shareholders'
equity 57,581 161,170
------------ ------------
Total liabilities and shareholders' equity $ 361,134 $ 422,327
============ ============
Reconciliations of Non-GAAP Measures to GAAP Measures
We define EBITDA as net income before interest expense, net, income taxes
and depreciation, amortization and accretion. Adjusted EBITDA further adjusts
EBITDA by excluding cumulative effect of changes in accounting principles,
discontinued operations, non-cash stock-based compensation expense and certain
other operating expenses that are reflected in our net income that we do not
believe are indicative of our ongoing core operations, such as significant
transaction expenses associated with the December 2005 transactions and the gain
or loss on disposal of assets and impairment charges. Adjusted EBITDAR adds back
rent to adjusted EBITDA. In addition, those expenses that we have excluded from
our presentation of adjusted EBITDA and adjusted EBITDAR (along with our royalty
expenses, marketing expenses, management fees and other items) are also excluded
in measuring our covenants under our revolving credit facility and the indenture
governing our senior notes.
We believe that adjusted EBITDA and adjusted EBITDAR are useful to investors
in evaluating our operating performance because:
-- they are used as a performance and liquidity measure under our
subsidiaries' revolving credit facility and the indenture governing our
senior notes, including for purposes of determining whether they have
satisfied certain financial performance maintenance covenants and our
ability to borrow additional indebtedness and pay dividends to us;
-- securities analysts and other interested parties use them as a measure of
financial performance and debt service capabilities;
-- they facilitate management's ability to measure operating performance of
our business because they assist us in comparing our operating
performance on a consistent basis since they remove the impact of items
not directly resulting from our retail convenience stores and wholesale
motor fuel distribution operations;
-- they are used by our management for internal planning purposes, including
aspects of our consolidated operating budget, capital expenditures, as
well as for segment and individual site operating targets; and
-- they are used by our board of directors and management for determining
certain management compensation targets and thresholds.
EBITDA, adjusted EBITDA and adjusted EBITDAR are not recognized terms under
GAAP and do not purport to be an alternative to net income as a measure of
operating performance or to cash flows from operating activities as a measure of
liquidity. EBITDA, adjusted EBITDA and adjusted EBITDAR have limitations as
analytical tools, and you should not consider them in isolation or as a
substitute for analysis of our results as reported under GAAP. Some of these
limitations include:
-- they do not reflect our cash expenditures, or future requirements, for
capital expenditures or contractual commitments;
-- they do not reflect changes in, or cash requirements for, working
capital;
-- they do not reflect significant interest expense, or the cash
requirements necessary to service interest or principal payments on our
revolving credit facility or senior notes;
-- they do not reflect payments made or future requirements for income
taxes;
-- although depreciation and amortization are non-cash charges, the assets
being depreciated and amortized will often have to be replaced in the
future, and EBITDA, adjusted EBITDA and adjusted EBITDAR do not reflect
cash requirements for such replacements; and
-- because not all companies use identical calculations, our presentation of
EBITDA, adjusted EBITDA and adjusted EBITDAR may not be comparable to
similarly titled measures of other companies.
The following table presents a reconciliation of net income to EBITDA,
adjusted EBITDA and adjusted EBITDAR:
Three Months Ended Year Ended
---------------------------- ----------------------------
Jan. 1, Dec. 31, Jan. 1, Dec. 31,
2006 2006 2006 2006
------------ ------------ ------------ ------------
(in thousands)
Net income $ (31,149) $ (10,919) $ (20,642) $ (3,746)
Depreciation, amortization,
and accretion 10,501 7,699 30,205 25,371
Net interest expense 7,338 8,522 18,135 22,610
Income tax - 48 - 48
------------ ------------ ------------ ------------
EBITDA $ (13,310) $ 5,350 $ 27,698 $ 44,283
Non-cash stock-based
compensation - 463 1,188 803
Management fee - 44 - 591
Loss (gain) on disposal of
assets (212) 277 (641) -
Other miscellaneous(a) 27,314 (235) 26,164 (452)
------------ ------------ ------------ ------------
Adjusted EBITDA $ 13,792 $ 5,899 $ 54,409 $ 45,225
------------ ------------ ------------ ------------
Rent expense 2,919 6,043 9,739 22,694
------------ ------------ ------------ ------------
Adjusted EBITDAR $ 16,711 $ 11,942 $ 64,148 $ 67,919
============ ============ ============ ============
(a) Other miscellaneous changes represent income from a non-consolidated joint
venture and other non-operating income. For the three months and year ended
January 1, 2006, includes $17.3 million compensation charge recognized in
connection with redemption of options related to the December 2005
recapitalization.
The following table presents a reconciliation of net cash provided by
operating activities to EBITDA, adjusted EBITDA and adjusted EBITDAR:
Year Ended
----------------------------
January 1, December 31,
2006 2006
------------ ------------
(in thousands)
Net cash provided by operating
activities $ 29,079 $ 25,613
Changes in operating assets &
liabilities (1,363) (2,804)
Gain on disposal of assets 641 -
Stock-based compensation expense (18,495) (803)
Minority interest (76) (51)
Fair market value in nonqualifying
derivatives (223) (330)
Income tax - 48
Interest expense, net 18,135 22,610
------------ ------------
EBITDA $ 27,698 $ 44,283
Non-cash stock-based compensation 1,188 803
Management fee - 591
Gain on disposal of assets (641) -
Other miscellaneous 26,164 (452)
------------ ------------
Adjusted EBITDA $ 54,409 $ 45,225
============ ============
Rent expense 9,739 22,694
------------ ------------
Adjusted EBITDAR $ 64,148 $ 67,919
============ ============
Susser Holdings Corporation
Pro Forma Condensed Consolidated Statements of Operations
(unaudited)
Three Months Ended Year Ended
---------------------------- ----------------------------
Jan. 1, Dec. 31, Jan. 1, Dec. 31,
2006 2006 2006 2006
------------ ------------ ------------ ------------
(in thousands)
Total revenues $ 509,085 $ 487,963 $ 1,896,264 $ 2,265,536
Total cost of sales 455,927 439,863 1,694,689 2,044,758
------------ ------------ ------------ ------------
Gross profit 53,158 48,100 201,575 220,778
Operating expenses:
Personnel 15,736 17,542 62,237 69,288
General and
administrative (a) 21,838 4,798 35,592 18,786
Operating 15,093 13,540 53,602 61,953
Rent (b) 5,890 6,043 22,853 22,694
Royalties (j) 829 727 3,396 3,574
Loss (gain) on disposal of
assets and impairment charge (212) 277 (641) -
Depreciation, amortization,
and accretion (c) (f) 6,549 5,895 24,557 23,380
------------ ------------ ------------ ------------
Total operating expenses 65,723 48,822 201,596 199,675
------------ ------------ ------------ ------------
Income (loss) from
operations (12,565) (722) (21) 21,103
Interest expense (d) (g) (2,976) (2,191) (12,930) (12,295)
Minority interests and
other miscellaneous (e) (185) 221 904 391
------------ ------------ ------------ ------------
Income (loss) before income
taxes (15,726) (2,692) (12,047) 9,199
Income tax benefit
(expense) (h) 5,504 894 4,216 (3,268)
------------ ------------ ------------ ------------
Pro forma net income (loss) $ (10,222) $ (1,798) $ (7,831) $ 5,931
============ ============ ============ ============
Earnings per common share:(i)
Basic $ (0.61) $ (0.11) $ (0.47) $ 0.36
Diluted $ (0.61) $ (0.11) $ (0.47) $ 0.35
Weighted average shares
outstanding:
Basic 16,705,404 16,705,404 16,705,404 16,705,404
Diluted 16,705,404 16,705,404 16,705,404 16,771,155
The pro forma adjustments for fiscal 2005 included above related to the
December 2005 recapitalization are as follows:
(a) Reduction to general and administrative expenses of $1.0 million to
reflect the termination of certain consulting agreements. Note that
$17.3 million of compensation expense recognized in connection with
redemption of options related to the 2005 Transaction has not been
eliminated.
(b) Increase to rent expense of $13.1 million, which includes $13.2 million
incremental cash rent, plus $1.4 million noncash straight-line rent
expense, less $1.5 million amortization of deferred gain on the sale
leaseback transaction.
(c) Reduction to depreciation and amortization expense of $4.9 million to
reflect the properties sold in the sale leaseback, plus an increase of
$2.3 million related to the step-up in basis resulting from the purchase
price allocation, the elimination of $3.8 million amortization expense
related to debt repaid, including write-off of unamortized loan costs,
and additional $1.0 million amortization expense related to new senior
notes.
(d) Increase to interest expense of $17.5 million related to the new senior
notes, decreased by $17.4 million interest expense related to the debt
repaid, including prepayment penalties.
(e) Elimination of $9.8 million for advisory, accounting, legal and other
non-recurring transaction-related expenses.
The pro forma adjustments for fiscal 2005 and 2006 included above related to
the IPO are as follows:
(f) Elimination of $0.2 million amortization expense related to the
redemption of $50.0 million of senior notes with proceeds from the IPO.
For 2006, also eliminates $1.8 million write-off of unamortized loan
costs.
(g) Elimination of $5.3 million interest expense related to the redemption
of $50.0 million of senior notes with proceeds from the IPO. For 2006,
also eliminates the $5.3 million prepayment penalty.
(h) Recording of an income tax provision at an effective rate of 35%.
(i) Reflecting earnings per share as if the corporate formation and IPO
occurred at the beginning of the fiscal year, and reflecting the pro
forma adjustments noted above. Dilutive shares were calculated using the
treasury stock method and assuming an average stock price from October
19, 2006 to December 29, 2006 of $18.78.
(j) No adjustment has been made to royalty expense, which terminates during
the first quarter of 2007 as the conversion from Circle K to Stripes is
completed.
The following table presents a reconciliation of pro forma net income to pro
forma EBITDA, pro forma adjusted EBITDA and pro forma adjusted EBITDAR:
Three Months Ended Year Ended
---------------------------- ----------------------------
Jan. 1, Dec. 31, Jan. 1, Dec. 31,
2006 2006 2006 2006
------------ ------------ ------------ ------------
(in thousands)
Pro forma net income $ (10,222) $ (1,798) $ (7,831) $ 5,931
Depreciation, amortization,
and accretion 6,549 5,895 24,557 23,380
Net interest expense 2,976 2,191 12,930 12,295
Income tax (5,504) (894) (4,216) 3,268
------------ ------------ ------------ ------------
Pro forma EBITDA $ (6,201) $ 5,394 $ 25,440 $ 44,874
Non-cash stock-based
compensation - 463 1,188 803
Loss (gain) on disposal of
assets (212) 277 (641) -
Other miscellaneous(a) 17,476 (235) 16,327 (452)
------------ ------------ ------------ ------------
Pro forma adjusted EBITDA $ 11,063 $ 5,899 $ 42,314 $ 45,225
------------ ------------ ------------ ------------
Rent expense 5,890 6,043 22,853 22,694
------------ ------------ ------------ ------------
Pro forma adjusted EBITDAR $ 16,953 $ 11,942 $ 65,167 $ 67,919
============ ============ ============ ============
(a) Other miscellaneous changes represent income from a non-consolidated joint
venture and other non-operating income. For the three months and year ended
January 1, 2006, includes $17.3 million compensation charge for redemption
of management options related to the December 2005 recapitalization that is
not eliminated in the pro forma adjustments.
Contacts: Susser Holdings Corporation
Mary Sullivan, Chief Financial Officer
(361) 693-3743
DRG&E
Ken Dennard, Managing Partner
(713) 529-6600
Anne Vincent, Senior Vice President
(210) 408-6321
SUSS-IR
SOURCE Susser Holdings Corporation
-0- 03/19/2007
/CONTACT: Mary Sullivan, Chief Financial Officer of Susser Holdings
Corporation, +1-361-693-3743; or Ken Dennard, Managing Partner,
+1-713-529-6600, or Anne Vincent, Senior Vice President, +1-210-408-6321, both
of DRG&E for Susser Holdings Corporation /
/Web site: http://www.susser.com /
(SUSS)