ARKO - Earnings call transcript Q4 2021

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Operator

Greetings, and welcome to the Arko Corporation Fourth Quarter and Full Year 2021 Financial Results Conference Call. At this time, all participants are in a listen-only mode. The question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to Ross Parman, Vice President of Investor Relations and Government Affairs. you. Thank

begin. may You

George Ross Parman

in Reform Chief stated, morning Year to and now, XXXX are have President, today, These section today's Good speak available also Private Forward-looking comparing and management Forward-looking periods will, fiscal future to Chief to Form otherwise actual call within annual Don statements today note Quarter XXXX the such date the today, the on information, cause financial words any based of to statements as Officer. XXXX. Financial Webcast. these 's and project, call, adjusted statements materially or materially unaudited, that those call does and revise actual to press and adjusted to quarter of Forward-looking XXth, to Chairman, results Today's cause including www.arkocorp.com. in could use financial on or SEC Kotler, Investor Fiscal Earnings XX-K results Arie made and XXXX may differ a the XX, Relations current this access the similar in By of intend, reason. publicly implied on information Officer, estimate, differ that and measures, expectations new detailed expects Arko's from report you. the These is file as by management's risks uncertainties securities and required company those the and Arko Bassell, welcome will federal release and Fourth undertake the February bonuses. meaning On Executive of incremental our Except Thank include with company's by to same could that website we release Unless refer are for be expressed are could, Conference made the is year press not subsequent everyone morning and statements to fourth company's furnished changing or and its should events, statements. filings Act of discussion any laws, risks beliefs, of make XXXX. any and circumstances, references may on at and EBITDA, Securities only was All involve from the the December periods. Litigation to Earnings for other during as results forward-looking call, during non-GAAP management Arko XXXX. EBITDA, as measures, SEC ended identified this the of may, net plan, Call EBITDA Please of to today's expect, on the year statements that update result same-store future described

investors, to note of to the like financial measures for comparable accordance GAAP presentation in or today that Please would information these I non-GAAP we from substitute believes conducting of company in the to useful presented as information our be While GAAP. measures. are considered not is our this that for locations. the isolation for directly call most financial provide respective reconciliations information the non-GAAP press our intended with refer a today's remote to release also measures

understanding. like cross-talk, review quarter delays, advance in may this As will your Arie the today's you or technical for such, there be call. On during thank brief and We minor issues call, other patience now, XXXX. I December your review would questions. results Don and to they And XX, call our more year ended over to financial the turn before detail Arie. then in take will

Arie Kotler

Good morning, everyone.

in quarter to for pleased results are fiscal report strong XXXX. We fourth the year

XXXX. increase a net incremental Fourth XX% net quarter versus bonuses EBITDA was million, EBITDA bonuses of incremental of of record adjusted $XX.X million. was year, a adjusted $XXX.X quarter the full the fourth For XXXX

merchandise in We well in growth. ORSL XXX quarter to for the long-term convenience long-term considerable the division position XX%. store, fourth points believe have expanded profitable and us Inside strategic our that undertaken initiative margin we our basis stores in

expansion and drive in categories. broadly to key continue margin We

in growth a Ohio, grab-and-go Empire. XX We for and gas fourth we to saw Handy acquired rapidly see fuel our XXXX, pivot May, fuel, per integrated strategic Mart substantial during realized rising In company-operated convenience margin located foods, and lots despite and margin in to our able frozen to gas considerable with in the Michigan and XX North has station, that of hit growth. significant continued were acquired quarter, a ExpressStop station prices. November, And sites we Carolina. in stores we also retail and currently all $XX.X and In stores customers with been we gallon development synergies grow

of of that Quarles prime cardlock be is acceptable For light in assets sites, have U.S. the non-GAAP and of complement footprint profitability. year, an and and the time today. platform footprint. supply purchase At basis east will cannot supply after for is exclusively an fleet largest we EBITDA rent other DC forward-looking ' the the states merchandise easily XXX northeast be that company own virome. of to as industrial added strategy, fuel cohorts we business. a annualized estate on equity $XX acquisition intend the value acquisitions company will our and finance and these million believe fund side recently fleet the with trucks the sources, That the replicated fuel million start asset of believe the southeast inventory, of to This of that synergize approximately and these strategic and million Most our this closing, drive and million will we million agreed $X.X million own unique $XX.X operator of is Quarles purchase Petroleum. $XXX fueling from the signing retail and agreement incremental a locations of announced its deal on using measures, The Quarles expand of of the the we We these commercial $XX.X strategically estimated that $XX.X contribution fueling seaboard, we real business paid We price. within cardlock coast. our can cardlock importantly, fleet believe purchase certain Street, acquired add remaining Washington business in The fueling this is at exciting rapidly mature our grow distribution to commercial and adjusted approximately price. approximately XX private assets expect along and to territory. Oak growth vehicles. approximately boost capabilities This the acquisition the buy

longer-term were on performance our material and initiatives. analyze have we remodel stores announce costs, constantly shortages, as existing construction Rock organic price and our macroeconomic expensive to in the strategic, factors multiple Moving we believe growth We XXXX. program. growth South November, in remodel our an we opportunities, base of organic Carolina initiatives, to and in we industry such Two through rising in some opportunity key that monitor Hill, embedded indicators and rebuild raze completed closely our XXXX fluctuations, labor remodeled shortages, and store

we completed ' Dunkin the a fourth additional quarter to stores these far are encouraging one undergoing are to in half store We And on in plan planning be open of locations. ' in the Dunkin break XXXX. We new so opened results XXXX. to in X first of location Texas ground We in new-to-industry from XXXX, locations have remodels seen Atlanta, XXXX.

remodel retainly ' locations. our also Dunkin We

announce the feedback planning of to to out think and We extremely Based Pizza Sbarro's been the aligns early margin While in area our excellent we that items One stores. organic a remodel preliminary key key forward, focus XXXX. strategies in-store sales are is build review plan promising rebuild of including opportunities, pizzas. food service growth in-stores including an program quick-serve launched December, in of there now. top deploy with food moving one focus XXXX. we several in-store and with Customer experience. growth, results, intend Subaru we partnerships. pace approximately positive. very our of will raze NTI our is elements and I this is program more has program on detail restaurant convenience that Last XX in and of and pilot we two are areas

hours target of time associate XX a with We're This to seven business and program stores. coffee for and very very with are changing. we that because experience growth with the Importantly, and our that Consumption coffee making overall eliminates XXX hot, [Indiscernible], enhance iced spend forward store believe allows rapidly of initial initiative. is habits on area and drives customer waste the less fast a service. this second week, time in lend coffee. A fresh, is move We more expanding to important. customer the an cup has day, partnership program being to been always days

We our strategy are stores. even more also working to grab-and-go reserve successful expand to

this footprint. our that rewards most Another will we're in-app customers reward, our enhance sales, have We marketing important We're the in-store the fast customer ability pickup heavily and just is long-term drive delivery. we program. that relationship strategic in deeper big know on deals. to features enrollment program. through will baskets. larger loyal are even program. and customers in user better enable work will more engagement often new for significant initiative new experience. operator our our There believe be about customer-specific excited This exciting, investing is the with will more or for messaging The is will One a to and overall the a and advertising, area capability our Customers us competitive connection have across app. There the with mobile investment, trips, make analytic and offers redesign app. to of app This even order app be also

enable of as EV sent pricing geofencing we Pantry, areas of to to community practices. to seriously. brands. are just our this fuel we governance managed operate, manner continue name we a local few because brand including initiative, communities and formal, have their users very the two society On in brands Mart, make social, and we that and where our Easy stakeholders, We responsible ESG expectation to take that customization important company highly also will we such We local our environmental, progress. Village responsibility an so FastMart, believe and for DAP, We our had where

We ESG the with with us standard. firm establish services are framework aligned help global an working global to the

We updated on will keep our progress. you

to chargers grants EV very seriously, in will be We also Colorado we stores take installed EV two first the that quarter won in come in online successfully Arko XXXX. for expect opportunity

process from applying are We for learnings building our capabilities. and future this activities the

adoption high-traffic rural are areas. footprint. towns is to located primarily will our important While we smaller our and remember in are term near across on location stores pursuing center that our grants It believe around corridors, we

charging well-positioned loyal EV builds, customers business serious demand part EV our make to As of drivers a we we our make stores. of believe are and

We also acquisitions. continue to pursue

deals XX continue we than XXXX, more and After transaction. strategy any winning potential we a many successfully and at believe since to can look we scale. know, acquire at you As have integrate

We way growth. levels and From always highly them. We have pursuing to focused the enhance opportunities, opportunistic strategically deploy disciplined for on deliberate growth service capital are to are many in manner. food initiative we and highly marketing consider about we best very

to We independent dealer businesses. as continue will of we like Board $XX continue our the assets. of to also acquisition for renewal pursue amount outlook to Today, repurchase first-ever of stores of dividend then we share bolt-on as up new of well acquisition our pursue that million. And convenience worth and and $X.XX an authorized Directors stock a common announced quarterly share per declared program aggregate

confidence these allocation cash beyond. navigating cash-generation were to We successes We challenging who business and successfully our environment. now financial results strong building return our to of Don, you when XXXX to through like walk very in to frameworks the position. financial consistent and ability to our detail. capital ended I a stockholders in and on the forward able turn our reflects a in ability look Our is with XXXX over grow our will would strong We fiscal in our position. to strength call

Donald Bassell

quarter. for $X.X million dollars to as with Empire, results. increased and margin and ExpressStop, was Arie. to a largely excluding the such It's great strong quarter million, prior-year Total food fourth-quarter XX.X%, $X.X to XXXX fuel with charges from prior with Merchandise the merchandise and of to profitability accounting million. Retail by categories increase for million XX% frozen same-store the in Mart Beginning speaking Thanks, increase, full-year the X% with by intercompany year, Handy excluding all $XX.X today gallon, million from coupled $X.XXX the fuel was increasing margin compared our period, grab-and-go. per versus profits margin you the fuel $XXX high-growth revenue increased be the and continued about strategic versus prior per period. $XX.X $X.XXX increased prior-year while fuel efforts gallon Retail our due year. quarter for both

$X.X fuel the gallon intercompany $X.X related for the $X $XX.X result wholesale these income an the ExpressStop, fuel wage by year, reflecting quarter quarter, foreign increase volume, from Fuel agent period. million Handy of and expenses at the a quarter $X.X due quarter, supply Adjusted the gains. for quarter, or Net store increase prior was to $XX.X profitability contribution XX% XX% of due the per per in Volume versus and For million support the Empire in expenses. due the by quarter expenses locations increase in year, incremental compared consignment fourth to increases, million to in increase quarter to to charges Fourth fourth loss the excluding compared prior-year. the the year interest an fourth expenses the annual to compared bonuses growth well decreased acquisitions, financial locations net million locations million of our cents expenses expenses as Fuel prior to addition approximate compensation XX $XX.X prior other of adjustments was XX% XXXX. period-over-period million million as increase gallon grew compared Mart, the and prior expenses an compared prior-year General driven of increase with contribution million prior margin for fuel of compared and the administrative for EBITDA for fuel XXXX, the the flat and were $X.XX. million or a incremental fuel $X.X currency for versus primarily higher recent and $XX.X quarter quarter acquisitions, X.X% versus fair increased quarter acquisition. to was most same-stores. year, million, credit up Empire in to of increased operating to fourth grew a of in primarily card value Net incentive for to million for margin from $X.X and warrants as for of stock XXXX. net a year, accruals, to the in gallon the

by increased -- us per million to Turning to increased margin The Retail gallon, basis improved with results, was $X.XXX margin million dollars the and losses volume strong economics. increase the purchasing a to as inter-company year, margin profitability, in charges XXX result our the same-store fuel excluding X% offset from primarily X.X% dollars excluding acquisition merchandise our per of more of of changes than billion, ExpressStop, capture of sales prior-year, versus increase mix Mart points the fuel increase. $XX.X $X.XXX margin merchandise gallon as full-year fuel for year. in versus was enabled sales X.X%. XX.X% a revenue the Empire, $X.X year. same-store total the prior increased due and Merchandise the $XX.X Handy merchandise prior Merchandise coupled in businesses, to

foreign from same-stores, EBITDA $XX.X to compared the Net million recorded for the with were to million million. XXXX Increased year, the higher to fair depreciation by increase bonds, the redemption from gross expenses, $XX.X million a and for same-stores. from fuel related outstanding earnings at coming deferred due in million net warrants. by $XX.X to period-over-period write-off offsets of of Net expenses other $X.X acquisition fuel card due at the year, year of incremental for XX.X% and to interest million year contribution result to primarily expenses from debt, million year. cents approximately associated and $XX same-store acquisitions. million million of the the our accruals, consignment the $XXX.X $XX.X acquisition. sold, profitability, for $XX.X prior by increase credit increases, Fuel to $X.X locations gallon the fuel the for to fees currency grew of to an expenses and in and same-stores. Store expenses. approximately the increase XX% expenses prior offset was with agent driven including prior Full-year to Israeli additional million by increased XXXX to fees, contribution prior a increased gains for XX% of million were and merchandise profit in the partially year, annual full compared and versus $XX.X for increase supply due Fuel million interest supply the fuel growth Empire acquisitions, and With versus excluding $X.XXX. the gallon were compensation inter-company prior $X.XXX compared charges, gallon $X compared stock credit strong and and grew Empire wholesale income higher EBITDA General acquisition, most costs, year year. early primarily the expense margin fuel incremental $XX.X year XXX our incentive net acquisition, up partial approximate the card contribution acquisition locations slight gallons with an Empire expenses to volume, $X.X in administrative increases gallons an million due or interest expenses fuel financing decrease margin per compared million from in acquisitions increased Empire compared the XXXX. and volume value for XXX of margin XXXX. million increase contribution $XX.X locations prior related of coupled of XXXX per both For the merchandise to was financial Incremental strong of to adjusted bonuses million, in the wage to operating the year, incremental adjustment fuel higher year, related Adjusted Empire of and of

million, December X.X $XXX liquidity approximately putting strong. $XXX consisting and our With lines net times. million, under available remains $XXX On at debt our was equivalents, of cash Our capital and short-term net million, of very leases, million XXXX balance our XXst leverage excluding $XXX was sheet investments cash approximately total approximately approximately credit. of and

year. repurchase expenditures that For expenditures representing year, $X.XX the to Capital million the declared million Directors quarterly by of we million full net net our as of to of share $XX activities $XXX.X an by as of stock of shares XXXX, to $XX Board provided for first-ever March for Directors $XXX.X operating The $ and of stockholders leasebacks, Oak million. of properties, of is share capital our were $XXX.X year, approximately up accounted the cash in March a of common Street company's Board was prior announced paid the proceeds of aggregate authorized dividend sale for of of a fee $XX.X million program two XXth, the purchase to XXth, paid certain transactions compared our common stock. XXXX. per on for record outstanding of also amount be million Today,

stock XXXX, sites As have I'm demonstrated million were for capability year pleased our the sites. our ended of we X,XXX December XXst, strong retail year. the We shares that through our outstanding. results X,XXX wholesale and common there with XXX.X of financial strength and

our to we through are next turn believe we continued consumer constantly to and Arie. we with to level. We changing that, I'll And it take navigated a environment, execute as to back over the business positioned

Arie Kotler

results, with the and efforts their progress we over value. excited will Operator? growth all today Thank And so business to like I'd it Operator I exceptional joining to to to stockholders that interest achieved these for the believe market our and made call why drive Arko. we customer's increased for team are thank in That's XX,XXX members We Don. and are a your have leader. continue far. questions. unique excellent you to execute we expectation. now for exceed we turn over I'm pleased differentiated the Thanks,

Operator

you. Thank

We please questions. will One a for question-and-answer be your moment now poll [Operator conducting session. we Instructions] while

Markets, Kelly with with your proceed the is please Our BMO Capital Bania of questions. coming first question from line

Benjamin Wood

taking Hi, for this on questions. Thank Wood you Kelly. is Ben for our

gallons, model expected First could takes XXXX, or think like been you Empire Hoping and particularly but in where see help the some same-store and over margins off, the how maybe you lighter what than in us little 'XX? in maybe going changed opportunity a FY for gallons, about Seems better, you lighter. the the came model of in fuel year most the forward better explain expected. and for than guidance, the of can were then light course of might upside have puts

Arie Kotler

model. Sure. I over let take will Don the about the question

Donald Bassell

And retail. again, were I at and Sure. looking margin the wholesale specific beats from Yes. looking in just fuel consensus, think at BMO, and the without numbers

the those were saw in SG in overall. biggest takes I differences two as think model. I &A the the

Benjamin Wood

speak outlook you. And bit margin then about you could maybe Okay. the for XXXX, Thank hoping fuel little a that.

with whether margins with if they in higher pressuring gas it or consumer, then are north flattish see think thinking do CPG oil could these reasonable we And be margins XXXX? of XX the you. size? that But on would the recently. higher are prices Thank impact basket margins prices, We is or in political it's of rise to environment prices, crude what trips

Arie Kotler

Thank Well, for you're little XXXX, looking the same-store XXXX and you for a were question. your for quarter. looking on second the really a gallons slightly of bit you're down gallons on the if

$X.XXX year, prices the to actually everybody up, what the in oil maybe less, of it's very any minute we per day. me in Ukraine can remind from $XX, I that's went But it's to $X.XXX talk end question margin the eventually, remind However, the is there Similar the no down It's tax of expanded can't drive now, really the $XX in when from settle I a at right of but XXXX. high We oil terms position. people order. that $XXX very And happened any last to very think very goes about prices. price short fuel. about commodity those saw situation as that talk same not early just situation, do want to -- gallon versus see, situation but retail too you in I time. the

the people about to is spending especially in However, than less of store see the COVID-XX, store, are basket their coming large the on when road. and that light already time mean, time I talking much we belief XX basket time That's believe They're to less for between I we're the right will change. wherever change XX going we being. the don't any anything now. reason to saw that That's me. don't that anything I have actually before. to is my think

Benjamin Wood

Okay. That's helpful. Thank you.

Operator

Thank you.

line Our comes the Bobby proceed questions. with James. with questions next Raymond Griffin from of Please your

Robert Griffin

morning, to Is of some levels, back fair? less with Good everybody, finally then basis. passed year-to-date and XQ, normal, for I margins. look there's the guess, from variance then parts January gallons or lot starting to starting of maybe but you But the course, variability to you first, moving questions. to retail XXXX getting at monthly period weekly my a you and to thank breaking back taking different we're with it closer a around that not compare things we're gallons of are moving of on perspective? the on and when out leveling February a basis 'XX And to out see see of

Arie Kotler

our that what can you are saw of basically I to year. really Bobby, And talk see the QX QX. QX, you gallons same the that tell flat about obviously, in but can't is almost in I trend you last Q basically

continue gallons back. coming versus, often lighter over one people there continue The to we are So see coming of be margin back. and as will is in get but the very, to COVID as to see, here, coming gallons think yes, more yes, no question I gallons back, you driving can is think I refer that light I thing very basically that, those are strong

XXXX. quarter probably first only saw XXXX I we what So different the think from in to that's

Robert Griffin

great merchandise Okay, helpful. And that's we so margin. very the on continue then progress

quarter know exact. multiple journey? close basis there? when to points up we see it about lot modest in going you're on, What XXXX on a fruit of could in great changes a think XXX to initiatives can be to but -- still there's within low-hanging basis working going XXX we are the year, I or Another is big is we points Where step margins? where we the the still there more merchandising improvement be function

Arie Kotler

as long-term couple a it's earlier, We this of to -- is to on started is not just basically this question and think of important I you're them. you because initiative. as if First it's show, to a example looking very -- mention to and going -- great because detailed all, our a mentioned I'm use one-time I going performance,

the remember is, all if year you're initiative and you basis was a looking about if And this So I increase first we points XX% frozen food. XXXX, in of saw speaking one on X,XXX -- our QX, grab-and-go category really in this at XXXX. QX you increase in now and if frozen QX we in And food XXX completed versus saw XXXX initiative. QX of We the remember, basis started points XXXX. of grab-and-go in basically we beginning initiative the

we XXX and XXX added reserves grab-and-go added. We have that that cases to and -- close we XXX

one QX. actually see margin for substantially. The other categories. those on The food key things frozen that was in QX grab-and-go XX.X% margin XX% drives think to for same was close we the the of I that's margin thing in some and

a for increase and are people spend basis margin their purchases. going best saw a XXX sales points Why? We pack and a of of the One was quarter time increase saw out, we X.X%. dev. more the because out, categories basically, people of increasing

need As one categories areas that to think I I are tell don't the that like here to to those you are really concentrate. nicotine we that I stay. of said, the is

- consumption going year cigarettes see quarter-after-quarter, over-year. down You on is that

the OTP nicotine OTP grew on a basis XXX looking points category, category and we you're category, if the However, in sales saw QX, our increase X.X%. of

center talking of those what the when store about categories, the margin. drove when that's So categories, you're talking you're about really

have I this to week. we what not and remodel the XXXX, consumer convenience we show the in make earlier, initiative still We XXX, and the six moving we In are coffee from serve later. of We a for a sure bit change another have And board. the want may people since are to to of big detailed morning not NTI dramatically. -- hours days. the mentioned do coming coffee on day, that they're the are as terms driving working that forward, I People is XX coffee. and a seven want They be up home [Indiscernible] store. fresh little lot in a business.

XXX are coffee installing machine. We bean-to-cup

coffee week. fresh going days And hours we're day, XX so seven in -- a to coffee have a

saw, tell to are service addition Sbarros. and started course, far In last basically, and year of from need a XX is we you, mean, I I so X Number convenient XXXX. we X that in the it's the that, to we Sbarro. results adding Number great pizza pizza XX -- are We food in Sbarro with the that don't stores, adding have relations we

All that,i margin the least see things that's of over drive the trend will forward. And mentioned margin at we those higher here. those things that keep moving are that and

Robert Griffin

I appreciate best here luck XXXX. of that detail in Okay.

Arie Kotler

you. Thank

Operator

Thank you.

from with proceed Our next the of Astrachan line your coming please question is Stifel, questions. Mark with

Chris Armes

guys, actually morning. good This for Hey, Chris Mark. on is Armes

off Just the here. here side. wanted on cost an start in to Obviously inflationary environment

then a in to in So And if just could of wage also passing seeing in the comment on little store. what terms bit maybe success through inflation you talk you're inflation?

Arie Kotler

cost is this do inflation, end It is most consumers. foreseeing ourselves. knows associated with when of chain including and have X% is issues that those -- to effectors, Obviously, everybody include is pass to day, supply the with what to we you the start basically of phrase Sure. from costs also of and have inflation. everybody at increase a of that course, I'll

us always different This those is margin profit. of can little we our a we prices, the And, is store. That remaining manage just order bonuses, same we per we to people our that sell to have there stores to again, the passing time, In have have appropriate to I we storage, was of strategy. same some we labor competition. very model, always margin labor even thing this time, program very rates sure can about remind sign-on to I here. and order some that no, extent keep Chris, we will And that that the over a label I have that one stores competitive, is manage our choice. have we labor And you, than and to We is two very, the market. -- at the those stores. sure retention one to here. think no think strategy consumer, and though tight run clench kind successful -- to question thing with very can basically making the the to bit we the square our program maintain of all penny average see make make in X,XXX on is X,XXX the and no prices talk our it are was competitive a that, are we -- at over we've been think, our a very, foot run we're well, run competitive, to I

Chris Armes

up the play. about maybe an you. fuel primarily the an on Thank like If also then And pace does acquisition I you Got acquisition, reasonable? more increasing versus specific you more or of think today the becoming is that guys multiples just it. those on on could follow M&A, footprint. market in-store It of do acquisition. with of acquisitions seem evidence announced How the are congrats is like

Arie Kotler

Sure. Sure. Sure. Good question.

first the acquisition completed you at XXXX, Empire So the in saw we end as all, XXXX. of of

The I doing strategic lineup. of the we a us, the -- that, remember, growth the interesting Quarles territory. the acquisition mentioned. cloud two being a stores, great is very and And time, XXX interesting the stores the a in stores, XX east November. Stop we I Midwest, that such on you synergize the start the And that two our color look those coast, Carolina, know acquisition. completed while talking sure costs what's that Virginia, deal working of synergies, in particular make we're to capture same we we did drive this Express acquisition doing another operator about Thirty that of deal XXXX. years, we the actually we a team as did time spend believe lot year say in So make large that this At we end would will is job six and North at on and unique the merge we over this for own is brand acquisitions, really the after a great brand sure this The is companies largest these May. acquisition I'm

to like diesel they mix. fleet business very, is very of large So replicate coast there actually trucks. gasoline that actually very XX% would a stores, selling lot that basically it's basically business and that. locations is To are be this think Approximately -- difficult is attractive those largest to to actually, about of this diesel. those It's east a and the

rent, I not I that that's basically on call. almost to call, felt paying a when help million. $XX.X acquisition. and $XX.X When paying the we the everything on everything amount And can -- $XX said million. respect and of of our in actually to after quality it refer Empire. Oak Street, It's million business is basically From standpoint, acquisition, adding to it's after from re-utilizing we're multiple think the million of done, adjusted as us the every are EBITDA mentioned boost So up are the $XX line we end adding we I we something

others. really are you basically know multiple you're us on we -synergies, little that's And times. profitability and about deals thing different some pre enhance X.X for of over the talking that's between think bit or a I We a our If X.X, EBITDA do to an looking over equity lot one us, here.

That's of QX, the coming third beginning year, think of we quarter. changed details, saw every lot in beginning QX, acquisition think there a we the I after in to basically and is second usually just the the opportunities the selling of year, more the past. in -- a what people and usually So start basically like anything in about think I don't think has and that see terms slowdown I of what

Donald Bassell

to if been a passed could diesel. of as said, all what around, and offer lot one cardlock Arie add driving more thing Arie Richmond probably it unique when these throughout again, acquisition Chris, the XX% you've I but said, and you've is

think believe EV wherever you and EV we business. a things the a because heard We of on as there's making more side as we of on is about, we obviously the we're move Colorado this there going EV, ordered trucks believe good of talked Arie strategically to to going on is. efforts trucking later being are this While be we're that us road so for jump online, fleet doing with two big adopter in

So we think there's less risk here, although it. we're not ignoring

for good move we So a think it's us. strategic

Arie Kotler

Just locations. Chris, to -- finish this business unmanned this remember this is locations a those on of XX/X all line and are on

that's industrial discussed I thing one like and actually the So and actually labor earlier light locations. about we about built those are for that. That of unmanned to inflation, going that they back vehicles those we specifically mean, fleets -- what and the locations visit commercial facilities,

Chris Armes

That's helpful. Thanks, guys.

Operator

please with next your the America, line question is proceed Bank from of coming questions. Our Reuter with William of

William Reuter

morning. I two. just have Good

for you I is year? don't Do I first The think you what year a 'XX. fiscal of saw capex spend have to an this expectation expect estimate

Arie Kotler

for We don't XXXX, we that's Don basically XXXX to put if in you? spent be you want. what for helpful if but can going we projections refer XXXX, refer can to to

Donald Bassell

up and again, projections because the what and put we best don't heard our way initiatives I doing. think we're you've

with terms going of specific as but last look already on at from on outlined probably and again, EMV, nothing put we're we out on. and on project and of point of again one raze our, So something the the we to just we're significant, going and and go was said, rebuild. have spent our trend capex there. you've projections also something with year, is industry Sbarro's, we did in what out not a that's new on the heard I -- efforts, things of going that's the would roughly the not to our capex, just lot, we There's and of And remodels doing want to scheduled is doing we're the to outlining but and not which specifically we'll in million have spend year this but a this but $XX about to I be also

different about we of on things of purchase back first also have million land. them. going we forth, have we'll And we're rights $X opportunistic spend take and refusal, where You just

maintenance. you was the XX at looking we're were for going from I X/X think of allocation capital roughly I of tell rest capex our forward. investment. The So about will

Arie Kotler

sorry And I over to jumping important think it's very in. here to point --

capex remodels think mentioned was net-net only pieces that looking spend capex I important for was coolers we dollars of we $XX if to it's investment real and and over freezers. $XX that it really very you're including purchasing capex maintenance that on the the point rest million the of here, million, some estate, really of the

those I about And think things to are it. so the think

about and the for we will So talking at we Those you machine investments laid I'm in initiative, terms they, big, actually do XXX when coffee capex, not you follow that big down $XX. the of cup a least additional see BX are rebuilds. XXXX. raze and

William Reuter

guys topic was one rebuild, did you the and offering, about. excited certainly of -- raze On of you initiatives guys your I were when pretty that high-yield the

pace with the have evaluate half about regard the performance think then of the 'XX, and now plan FY those year? right of six will to guess I first the second you of you for half So the

Arie Kotler

stores great. return need -- presentation published on of what the, we shortages for capital. the this you big we we looks to is forward are to your are our to promising. first same that this six terrific, it store increase, and -- what there's that, going those the I six is sure investment looking that An call the presentation, the we the waiting time to And of are I'll tell not we to been the but is just which of the the answer two. opened. actually had going stores, that to to one stores, picture, because do of know today, don't are part very, Sbarro. stores the results those very from have We recalls. page actually remodel learn continue the We finished had the the basically And really raze forward. we access completing We do want and do, at -- two that completed to The is a yes, rebuild doing XXXX. results it's the this which what move That's reason store stores. basically in a as we finished moving until if so first blueprint construction far you with we XX question, guys the make is is on we're finish across-the-board, the answer -- to lot the of going The we're is to you, we're six QSR. said material, we're we we're decided

a opportunity to for is great to So we that continue remodel. felt our us this expand

going as to and after, have other in, that increased we additional initiatives and build We of margin. profitability course, XX increased well basically some actually Sbarro's as of course,

William Reuter

view you've I just opportunities have then I pursued. surprising story M&A initiatives have shares I the repurchasing what these little higher to share guess of a -- invest to IRRs. sorry, me. authorization was but consistently versus said only with -- that may on thought as as have potential process other this the for I Okay. well repurchase or some that And as is me growth of two, lastly lots organic a probably

Arie Kotler

your for just Basically, Sure. benefit.

that, years, and two are our of that, is aware in everybody of $XXX $XXX you that, now. past is over generated aware operations. we've that the liquidity over cash lieu right million This sure Over make in something to well million from of

the at So our have basically we the really all are saw results to is opportunity, performing results, of very as remarks earlier, very, of from simple with and we That's going show current great as an to for going I with strategy course, or made this is not good flow cash change. growth nothing believe change now and XXXX, you that we going a something right we this well, not price, that that. What

Arie Kotler

the felt a great of commitment that $XXX continue initiative utilize there billion -- would in between the liquidity this plenty year, going million do say have last year and for but we us We away of to just we actually team we to, other it's over on the Oak to and course, liquidity that of is we're opportunity. on price over take any like out that, $XXX price the Street. any to this or with and

William Reuter

Understood. Alright, you. thank

Arie Kotler

you. course. Thank Of

Operator

to closing Thank questions [Operator are I Instructions]. Kotler turn any further to for the There like time. would Arie comments. at no call you. this back over

Arie Kotler

just excited. beginning the just of end This Thank you of February. you in and February, participating, and I'm year, much, see, is very can are we everybody, very for the as the

opportunity opinion, progress very, Just exciting Quarles made announced far, I'm proud the very today over so very great this in moving I'm us. looking And for the that the forward. in for towards a my of morning is opportunity, and course. the future, we here of time Arko

I the thing And be of us. of initiatives the basically in and just planning deal Texas We that in and the to also I mean, grab-and-go course, the years. rest in and is is being we'll pursue the stores the is did the basically got planning are for year we you a that business we'll of into strategic I past in continue this continue the convenience acquisitions. Along breaking Atlanta, lot to mentioned on great the of stores unique initiatives remodel that that six opportunity can over we the opening only and carp ground we over are eight [Indiscernible] this a with as have here, NTI very a then we tell QX, stores, on freezers the that of going the XX Sbarro course, year to and

your I for today, best. everybody time you, thank So all and the wish you

Operator

participation. your does conclude we you. Thank appreciate This today's teleconference,

time. rest this disconnect Enjoy of may You your your day. lines at the

Arko (ARKO) 23 Feb 222021 Q4 Earnings call transcript