The Pantry's Q4 loss widened to US$4.8M from US$3.3M a year ago as revenue slipped to US$2.09B from US$2.17B; for the year, company swung to loss of US$2.5M from earnings of US$9.8M

CARY, North Carolina , December 11, 2012 (press release) – The Pantry, Inc. (PTRY), a leading independently operated convenience store chain in the southeastern U.S., today announced financial results for its fiscal fourth quarter and year ended September 27, 2012.

Fourth Quarter Summary:

Net loss was $4.8 million or $0.21 per share. This compares to net income of $3.3 million or $0.15 per diluted share in last year’s fourth quarter. Excluding the impact of impairment charges and loss on extinguishment of debt, net loss for the fourth quarter of fiscal 2012 was $2.0 million or $0.09 per share, compared to earnings per share of $0.37 in the prior year (see reconciliation below).
Adjusted EBITDA was $52.8 million, compared to $64.4 million a year ago.
Fuel gross profit was $44.0 million, compared to $64.4 million a year ago; retail fuel margin per gallon was $0.095 compared to $0.135 a year ago; comparable store fuel gallons sold decreased 2.6%.
Comparable store merchandise revenue increased 3.3%; excluding cigarettes, comparable store merchandise revenue increased 6.1%.
Merchandise gross margin was 34.6%, compared to 33.8% a year ago.
Store operating and general and administrative expenses were $153.7 million, compared to $157.7 million a year ago.
Net cash provided by operating activities was $28.5 million, compared to $71.6 million a year ago.

Fiscal Year 2012 Summary:

Net loss was $2.5 million or $0.11 per share. This compares to net income of $9.8 million or $0.44 per diluted share last year. Excluding the impact of impairment charges and loss on extinguishment of debt, net income for fiscal 2012 was $4.7 million or $0.21 per share, compared to earnings per share of $0.78 in the prior year (see reconciliation below).
Adjusted EBITDA was $210.1 million, compared to $231.7 million in fiscal 2011.
Fuel gross profit was $210.3 million, compared to $257.1 million a year ago; retail fuel margin per gallon was $0.115 compared to $0.135 a year ago; comparable store fuel gallons sold decreased 3.1%.
Comparable store merchandise revenue increased 3.3%; excluding cigarettes, comparable store merchandise revenue increased 5.9%.
Merchandise gross margin was 33.7% compared to 33.9% in fiscal 2011.
Store operating and general and administrative expenses were $610.0 million, compared to $628.5 million a year ago.
Net cash provided by operating activities was $144.0 million, compared to $178.7 million in fiscal 2011.
Long-term debt was $563.4 million as of September 27, 2012, down $183.8 million since the end of fiscal 2011.

President and Chief Executive Officer Dennis G. Hatchell said, “We generated approximately $53 million of adjusted EBITDA during the fourth fiscal quarter of 2012, which was above the mid-range of our expectations. Our team continued to deliver strong store operating results aided by the 13% foodservice sales growth in comparable stores, which helped offset the challenging fuel cost environment.”

Mr. Hatchell continued by saying, “For fiscal 2012, our comparable store merchandise sales were up 3.3%, up 5.9% excluding cigarettes, and we achieved our objective of bringing our fuel gallon volume more in line with industry trends. We are pleased to have completed a successful refinancing in August and to have reduced debt $184 million in fiscal 2012. As a result of the refinancing, we have addressed all of the company’s significant near term debt maturities. We are also excited that Joe Venezia has joined us as Senior Vice President of Operations to focus on growing sales and improving store operations.”

The Company believes its liquidity position will allow it to continue to execute its core strategic initiatives given the $89.2 million in cash on hand and $116.6 million in available capacity under its revolving credit facilities as of September 27, 2012.

Fiscal 2013 Outlook

The Company announced the following guidance ranges for its expected performance in fiscal 2013, which is a 52-week fiscal year:

Q1 FY12 Q1 FY13 Guidance FY12 FY13 Guidance

Actual

Low

High

Actual

Low

High

Merchandise sales ($B)(1) $0.428 $0.423 $0.433 $1.81 $1.83 $1.87

Merchandise gross margin 33.2% 33.7% 34.2% 33.7% 33.7% 34.2%

Retail fuel gallons (B)(1) 0.455 0.422 0.432 1.81 1.71 1.77

Retail fuel margin per gallon $0.122 $0.107 $0.127 $0.115 $0.115 $0.125

Store operating and general and administrative expenses ($M) $154 $148 $152 $610 $613 $625

Depreciation & amortization ($M) $27 $29 $30 $120 $115 $120

Interest expense ($M) (2) $21 $23 $24 $84 $89 $92

Capital expenditures, net ($M) $22 $17 $20 $55 $80 $95

(1)Fiscal 2013 guidance assumes closure of 35 – 40 stores
(2)Excludes loss on extinguishment of debt


Conference Call

Interested parties are invited to listen to the fourth quarter earnings conference call scheduled for Tuesday, December 11, 2012 at 8:30 a.m. Eastern Time. The call will be broadcast live over the Internet and will be accessible through either the Investors section of the Company's website at www.thepantry.com or www.companyboardroom.com. An online archive will be available immediately following the call and will be accessible for 30 days.

Use of Non-GAAP Measures

Adjusted EBITDA

Adjusted EBITDA is defined by the Company as net income (loss) before interest expense, net, gain/loss on extinguishment of debt, income taxes, impairment charges and depreciation and amortization. Adjusted EBITDA is not a measure of operating performance or liquidity under generally accepted accounting principles in the United States of America (“GAAP”) and should not be considered as a substitute for net income, cash flows from operating activities or other income or cash flow statement data. The Company has included information concerning Adjusted EBITDA because it believes investors find this information useful as a reflection of the resources available for strategic opportunities including, among others, to invest in the Company’s business, make strategic acquisitions and to service debt. Management also uses Adjusted EBITDA to review the performance of the Company's business directly resulting from its retail operations and for budgeting and compensation targets. Adjusted EBITDA does not include impairment of long-lived assets and other charges. The Company excluded the effect of impairment losses because it believes that including them in Adjusted EBITDA is not consistent with reflecting the ongoing performance of its remaining assets. Adjusted EBITDA does not include gain/loss on extinguishment of debt because it represents financing activities and is not indicative of the ongoing performance of the Company’s remaining stores.

Net Income and Net Income Per Share Excluding Certain Items

In addition to net income and net income per share presented in accordance with GAAP, the Company has also presented net income and net income per share for the three and twelve months ended September 27, 2012 and September 29, 2011 excluding the after-tax impact of non-cash charges related to impairment and loss on extinguishment of debt. Management believes that investors find this information useful as a reflection of the Company’s underlying operating performance and that this information facilitates comparisons between the Company and other companies in its industry. Management uses these measures as part of its preparation of operating plans, budgets and forecasts and in its assessment of the Company’s historical performance.

Additional Information Regarding Non-GAAP Measures

Any measure that excludes interest expense, gain/loss on extinguishment of debt, depreciation and amortization, impairment charges, or income taxes has material limitations because the Company uses debt and lease financing in order to finance its operations and acquisitions, uses capital and intangible assets in its business and must pay income taxes as a necessary element of its operations. Due to these limitations, the Company uses non-GAAP measures in addition to and in conjunction with results and cash flows presented in accordance with GAAP. The Company strongly encourages investors to review its consolidated financial statements and publicly filed reports in their entirety and not to rely on any single financial measure.

Because non-GAAP financial measures are not standardized, the measures referenced above, each as defined by the Company, may not be comparable to similarly titled measures reported by other companies. It therefore may not be possible to compare the Company's use of these measures with non-GAAP financial measures having the same or similar names used by other companies.

About The Pantry

Headquartered in Cary, North Carolina, The Pantry, Inc. is a leading independently operated convenience store chain in the southeastern United States and one of the largest independently operated convenience store chains in the country. As of December 11, 2012, the Company operated 1,573 stores in thirteen states under select banners, including Kangaroo Express®, its primary operating banner. The Pantry's stores offer a broad selection of merchandise, as well as fuel and other ancillary services designed to appeal to the convenience needs of its customers.

The Pantry Fourth Quarter and Fiscal 2012 Financial Results

© 2020 Business Wire, Inc., All rights reserved.