Exhibit 99.1

ARKO REPORTS SECOND QUARTER 2022 RESULTS

 

Net Income of $31.8 Million Increases Year-over-Year by 24.4% or $6.2 Million; Adjusted EBITDA Beats Consensus, Reaches All-Time Second Quarter High With 4.4% Increase in Q2 2022 Compared to Q2 2021

RICHMOND, VA, August 8, 2022 – ARKO Corp. (Nasdaq: ARKO) (“ARKO” or the “Company”), one of the largest convenience store operators and fuel wholesalers in the United States, today announced financial results for the quarter ended June 30, 2022.

 

Second Quarter 2022 Key Highlights

Operating income was $48.3 million for the quarter, an increase of 5.5% compared to $45.8 million in Q2 2021
Net income was $31.8 million, an increase of $6.2 million or 24.4% compared to $25.6 million in Q2 2021
Adjusted EBITDA increased 4.4% to $79.0 million for the quarter compared to $75.7 million in Q2 2021
Merchandise revenue of $431.8 million for the second quarter compared to $426.4 million in Q2 2021; total merchandise contribution increased $9.0 million, or 7.3%, to $131.4 million, compared to Q2 2021
Merchandise margin increased 170 basis points to 30.4% compared to 28.7% in Q2 2021
Second quarter same store merchandise sales excluding cigarettes was 5.7% on a two-year stack*
Second quarter total fuel gross profit of $130.8 million increased 15.1% versus Q2 2021
Approximately 3.1 million shares of common stock repurchased during Q2 2022 at an average price of $8.65, for $27.0 million
The Company paid a quarterly dividend on June 15, 2022, of $0.02 per share of common stock, for a total cash payment of $2.4 million; and the board of directors declared a quarterly dividend of $0.02 per share of common stock, to be paid on September 12, 2022, with a record date of August 29, 2022

“ARKO has continued to successfully execute our growth strategy, delivering for our loyal customers while creating long-term value for our stockholders. This quarter’s record results are a testament to our ability to manage margin and volume while staying competitive,” said Arie Kotler, President, Chairman and Chief Executive Officer of ARKO. “While we delivered excellent results in an environment of higher fuel prices, we believe that our fuel strategy also enables strong results as fuel prices decline. Despite inflation pressures, we kept customers coming to our Family of Community Brands with compelling offerings, growing same store merchandise sales in key categories while increasing margins. As these excellent financial results show, our differentiated business model is very resilient, and I believe we are well-positioned to continue our growth.”

 

* Same store merchandise sales increase on a two-year stack basis is the same store merchandise sales increase in the current year added to the same store merchandise sales increase in the prior year period. This measure may be helpful to improve the

 


 

understanding of trends in periods that are affected by variations in prior year growth rates. See also “Use of Non-GAAP Measures” below.

 

Second Quarter 2022 Segment Highlights

Retail

 

For the Three Months
Ended June 30,

 

 

For the Six Months
Ended June 30,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

(in thousands)

 

Fuel gallons sold

 

253,243

 

 

 

264,967

 

 

 

492,801

 

 

 

491,079

 

Same store fuel gallons sold (decrease) increase (%) 1

 

(10.6

%)

 

 

11.9

%

 

 

(7.1

%)

 

 

(1.7

%)

Fuel margin, cents per gallon 2

 

41.3

 

 

 

34.3

 

 

 

39.4

 

 

 

33.3

 

Merchandise revenue

$

431,751

 

 

$

426,365

 

 

$

798,736

 

 

$

785,646

 

Same store merchandise sales (decrease) increase (%) 1

 

(2.7

%)

 

 

2.4

%

 

 

(3.1

%)

 

 

4.0

%

Same store merchandise sales excluding cigarettes increase (%) 1

 

1.4

%

 

 

4.3

%

 

 

0.8

%

 

 

6.5

%

Merchandise contribution 3

$

131,364

 

 

$

122,413

 

 

$

239,556

 

 

$

220,940

 

Merchandise margin 4

 

30.4

%

 

 

28.7

%

 

 

30.0

%

 

 

28.1

%

 

 

 

 

 

 

 

 

 

 

 

 

1 Same store is a common metric used in the convenience store industry. We consider a store a same store beginning in the first quarter in which the store had a full quarter of activity in the prior year. Refer to Use of Non-GAAP Measures below for discussion of this measure.

 

 

 

 

 

 

 

 

 

 

 

 

 

2 Calculated as fuel revenue less fuel costs divided by fuel gallons sold; excludes the estimated fixed margin paid to GPMP for the cost of fuel.

 

 

 

 

 

 

 

 

 

 

 

 

 

3 Calculated as merchandise revenue less merchandise costs.

 

 

 

 

 

 

 

 

 

 

 

 

 

4 Calculated as merchandise contribution divided by merchandise revenue.

 

 

For the second quarter, retail fuel profitability (excluding intercompany charges by ARKO’s wholesale fuel distribution subsidiary, GPM Petroleum LP (“GPMP”)) increased approximately $13.7 million compared to the prior year period to $104.7 million. Strong fuel margin capture of 41.3 cents per gallon in the second quarter of 2022 increased 20.4% compared to Q2 2021. There was an increase in same store fuel profit of $8.5 million compared to Q2 2021 (excluding intercompany charges by GPMP).

Same store merchandise sales excluding cigarettes increased 1.4% for the quarter and increased 5.7% on a two-year stack basis for the quarter. Merchandise margin increased 170 basis points, and total merchandise contribution increased to $131.4 million, or approximately 7.3%, both compared to Q2 2021. This was primarily due to higher contribution from packaged beverages, center-store items, beer and wine, and other tobacco products.

 

Wholesale

 

 


 

 

For the Three Months
Ended June 30,

 

 

For the Six Months
Ended June 30,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

(in thousands)

 

Fuel gallons sold – fuel supply locations

 

193,164

 

 

 

214,761

 

 

 

374,105

 

 

 

398,406

 

Fuel gallons sold – consignment agent locations

 

37,996

 

 

 

41,964

 

 

 

73,993

 

 

 

79,875

 

Fuel margin, cents per gallon1 – fuel supply locations

 

7.2

 

 

 

5.6

 

 

 

7.1

 

 

 

5.4

 

Fuel margin, cents per gallon1 – consignment agent locations

 

32.3

 

 

 

25.4

 

 

 

30.7

 

 

 

23.7

 

 

 

 

 

 

 

 

 

 

 

 

 

1 Calculated as fuel revenue less fuel costs divided by fuel gallons sold; excludes the estimated fixed margin paid to GPMP for the cost of fuel.

 

 

Wholesale fuel profitability for the quarter (excluding intercompany charges by GPMP) increased approximately $3.5 million compared to the prior year quarter. Fuel contribution from fuel supply locations grew by $1.9 million (excluding intercompany charges by GPMP) compared to Q2 2021, primarily due to greater prompt pay discounts related to higher fuel costs and greater fuel rebates.

 

Fuel contribution from consignment agent locations increased by $1.6 million (excluding intercompany charges by GPMP) compared to the prior year quarter. Fuel margin also increased over the second quarter of 2021 primarily due to greater prompt pay discounts related to higher fuel costs, greater fuel rebates and improved rack-to-retail margins.

 

Store Operating Expenses

For the second quarter of 2022, our convenience store operating expenses increased $22 million, or 15.1%, compared to Q2 2021, primarily due to approximately $10 million of incremental expenses related to the 2021 Handy Mart and ExpressStop acquisitions and an increase in expenses at same stores, including a 15.8% increase, or $8.4 million, in personnel costs, and a 22.5% increase, or $4.1 million, in credit card fees due to higher retail prices.

 

Internal Entity Realignment and Streamlining

 

Subsequent to the reporting period, the Company approved an internal realignment of certain direct and indirect subsidiaries. The restructuring is intended to streamline business operations and provide long term synergies and other cost savings and is occurring in a series of steps, the majority of which are expected to be completed by the end of third quarter of 2022. As part of the internal restructuring plan, the tax status of certain subsidiaries will change from non-taxable to taxable. The recognition and derecognition of certain deferred taxes will be reflected in the continuing operations as of the respective dates that changes in tax status occur. As a result of this restructuring, the Company expects to record a one-time, non-cash tax expense in the amount of approximately $8.5 million in the third quarter of 2022.

 

Quarles Acquisition

 

The Company continued its successful acquisition strategy, closing its 21st acquisition in less than 10 years. On July 22, 2022, the Company acquired from Quarles Petroleum, Incorporated (“Quarles”) certain assets, including 121 proprietary Quarles-branded cardlock sites, management of 63 third party cardlock sites for

 


 

fleet fueling operations, and 46 independent dealer locations, including certain lessee-dealer sites. The Company also acquired a small transportation fleet.

 

Using estimated forward-looking non-GAAP measures, the Company expects that the Quarles Acquisition will add approximately $17.5 million of adjusted EBITDA on an annualized basis.+ The total consideration for the transaction was approximately $170 million plus the value of inventory on the closing date. The Company financed approximately $40 million of the purchase price using its GPMP line of credit, and Oak Street Real Estate Capital, a Division of Blue Owl Capital, a private equity real estate firm, paid approximately $130 million of the aggregate purchase price, for the fee simple ownership of 39 sites.

 

+ At this time, ARKO is unable to provide a quantitative reconciliation of estimated forward-looking non-GAAP performance measures without unreasonable efforts due to the carve-out nature of the Quarles Acquisition.

 

Other Strategic Initiatives

 

The Company continued to pursue multiple strategic initiatives in the second quarter, completing five store remodels while continuing to implement aspects of its remodel program including investment in high-margin categories and improved foodservice in stores throughout its footprint. This included remodeling store deli areas to open four Sbarro pizza locations in the second quarter, for a total of eight open for business. The Company continues with its plan to open 50 Sbarro locations by the end of 2022.

 

Like the Company’s successful grab-and-go and freezer strategy, the Company installed high-quality, on-demand bean-to-cup coffee machines in 548 stores, exceeding its stated goal of 525 stores.

 

In addition, this year the Company is planning to break ground on three new Dunkin’s, and remodel two additional Dunkin’ stores. Two Dunkin’s have been remodeled so far this year. One Subway was remodeled in Q2, for six total Subway remodels this year. The Company remains on track to commence engineering on a new-to-industry store in Atlanta, Texas.

 

The Company recently installed level 3 fast chargers at a Village Pantry in Marysville, Ohio, deployed by ChargePoint, which can support all types of EVs. The Company previously announced that chargers will be installed at two stores in Colorado, with the goal of continually growing its EV charging footprint and capabilities.

 

Environmental, Social and Governance Policy

 

ARKO is committed to creating long-term value for our stockholders, employees, and communities. As a leading convenience store and gas station operator, we are focused on integrating environmental sustainability, social responsibility, and corporate governance (ESG) principles that are aligned with our long-term business strategy. On July 9, 2022, the Nominating and Corporate Governance Committee of ARKO’s Board of Directors formally adopted the Company’s ESG policy, which is available online: arkocorp.com/company-information/responsibility.

 

Liquidity and Capital Expenditures

 

As of June 30, 2022, the Company’s total liquidity was approximately $727 million, consisting of cash and cash equivalents and short-term investments of approximately $282 million, and approximately $445 million available under lines of credit.

 


 

 

Outstanding debt excluding capital leases was approximately $714 million, resulting in net debt of approximately $432 million. In the second quarter of 2022, the Company spent $24.5 million for capital expenditures, including bean-to-cup coffee equipment, upgrades to fuel dispensers and other investments in our stores, including the completion of five store remodels, building-out four in-store Sbarro pizza sites, and other investments noted above.

 

Quarterly Dividend and Share Repurchase Program

 

The Company’s board of directors declared a quarterly dividend of $0.02 per share of common stock, to be paid on September 12, 2022, to stockholders of record as of August 29, 2022. This is the Company’s third consecutive quarterly dividend.

 

In the second quarter of 2022, the Company repurchased approximately 3.1 million shares of common stock for approximately $27.0 million at an average price of $8.65, following which approximately $11 million remained available in the Company’s previously announced original $50 million share repurchase program. As of June 30, 2022, the Company had approximately 120.1 million shares of common stock outstanding.

 

The Company’s continued ability to return cash to our stockholders through a quarterly cash dividend program and a share repurchase program is consistent with our capital allocation framework and reflects the Company’s confidence in the strength of our cash generation ability and strong financial position.

 

Store Network Update

 

The following tables present certain information regarding changes in the store network for the periods presented.

 

 

For the Three Months
Ended June 30,

 

 

For the Six Months
Ended June 30,

 

Retail Segment

2022

 

 

2021

 

 

2022

 

 

2021

 

Number of sites at beginning of period

 

1,396

 

 

 

1,324

 

 

 

1,406

 

 

 

1,330

 

Acquired sites

 

 

 

 

61

 

 

 

 

 

 

61

 

Newly opened or reopened sites

 

 

 

 

1

 

 

 

 

 

 

1

 

Company-controlled sites converted to

 

 

 

 

 

 

 

 

 

 

 

 consignment locations or fuel supply locations, net

 

(1

)

 

 

(3

)

 

 

(7

)

 

 

(3

)

Closed, relocated or divested sites

 

(7

)

 

 

(2

)

 

 

(11

)

 

 

(8

)

Number of sites at end of period

 

1,388

 

 

 

1,381

 

 

 

1,388

 

 

 

1,381

 

 

 


 

 

For the Three Months
Ended June 30,

 

 

For the Six Months
Ended June 30,

 

Wholesale Segment 1

2022

 

 

2021

 

 

2022

 

 

2021

 

Number of sites at beginning of period

 

1,625

 

 

 

1,597

 

 

 

1,628

 

 

 

1,597

 

Newly opened or reopened sites 2

 

21

 

 

 

20

 

 

 

40

 

 

 

34

 

Consignment or fuel supply locations

 

 

 

 

 

 

 

 

 

 

 

converted from Company-controlled sites, net

 

1

 

 

 

3

 

 

 

7

 

 

 

3

 

Closed, relocated or divested sites

 

(27

)

 

 

(10

)

 

 

(55

)

 

 

(24

)

Number of sites at end of period

 

1,620

 

 

 

1,610

 

 

 

1,620

 

 

 

1,610

 

 

 

 

 

 

 

 

 

 

 

 

 

1 Excludes bulk and spot purchasers.

 

2 Includes all signed fuel supply agreements irrespective of fuel distribution commencement date.

 

 

 

Conference Call and Webcast Details

 

The Company will host a conference call to discuss these results at 10:00 a.m. Eastern Time on August 9, 2022. Investors interested in participating in the live call can dial 877-605-1792 or 201-689-8728. A telephone replay will be available approximately two hours after the call concludes through August 23, 2022, by dialing 877-660-6853 or 201-612-7415 and entering confirmation code 13731897.

 

There will also be a simultaneous, live webcast available on the Investor Relations section of the Company’s website at https://www.arkocorp.com/. The webcast will be archived for 30 days.

 

About ARKO Corp.

 

ARKO Corp. (Nasdaq: ARKO) is a Fortune 500 company that owns 100% of GPM Investments, LLC and is one of the largest operators of convenience stores and wholesalers of fuel in the United States. Based in Richmond, VA, our highly recognizable family of community brands offers delicious prepared foods, beer, snacks, candy, hot and cold beverages, and multiple popular quick serve restaurant brands. Our high value fas REWARDS® loyalty program offers exclusive savings on merchandise and gas. We operate in four reportable segments: retail, which includes convenience stores selling fuel products and other merchandise to retail customers; wholesale, which supplies fuel to independent dealers and consignment agents; GPM Petroleum, which sells and supplies fuel to our retail and wholesale sites; and fleet fueling, which operates proprietary cardlock locations, manages third-party cardlock locations, and markets fuel cards that give customers access to a nationwide network of fueling sites. To learn more about GPM stores, visit: www.gpminvestments.com. To learn more about ARKO, visit: www.arkocorp.com.

 

Forward-Looking Statements

This document includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may address, among other things, our expected financial and operational results and the related assumptions underlying our expected results. These forward-looking statements are distinguished by use of words such as “anticipate,” “aim,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would” and the negative of these terms, and similar references to future periods. These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to, among other things, changes in economic, business and market conditions; our

 


 

ability to maintain the listing of our common stock and warrants on the Nasdaq Stock Market; changes in our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects and plans; expansion plans and opportunities; changes in the markets in which we compete; changes in applicable laws or regulations, including those relating to environmental matters; market conditions and global and economic factors beyond our control, including the potential adverse effects of the ongoing global coronavirus (COVID-19) pandemic on capital markets (including with respect to new variants of the virus), general economic conditions, unemployment and our liquidity, operations and personnel; and the outcome of any known or unknown litigation and regulatory proceedings. Detailed information about these factors and additional important factors can be found in the documents that ARKO files with the Securities and Exchange Commission, such as Form 10-K, Form 10-Q and Form 8-K. Forward-looking statements speak only as of the date the statements were made. ARKO does not undertake an obligation to update forward-looking information, except to the extent required by applicable law.

 

Use of Non-GAAP Measures

We disclose certain measures on a “same store basis,” which is a non-GAAP measure. Information disclosed on a “same store basis” excludes the results of any store that is not a “same store” for the applicable period. A store is considered a same store beginning in the first quarter in which the store had a full quarter of activity in the prior year. We believe that this information provides greater comparability regarding our ongoing operating performance. Neither this measure nor those described below should be considered an alternative to measurements presented in accordance with generally accepted accounting principles in the United States (“GAAP”) and are non-GAAP financial measures.

We define EBITDA as net income before net interest expense, income taxes, depreciation and amortization. Adjusted EBITDA further adjusts EBITDA by excluding the gain or loss on disposal of assets, impairment charges, acquisition costs, other non-cash items, and other unusual or non-recurring charges. Each of EBITDA and Adjusted EBITDA is a non-GAAP financial measure.

We use EBITDA and Adjusted EBITDA for operational and financial decision-making and believe these measures are useful in evaluating our performance because they eliminate certain items that we do not consider indicators of our operating performance. EBITDA and Adjusted EBITDA are also used by many of our investors, securities analysts, and other interested parties in evaluating our operational and financial performance across reporting periods. We believe that the presentation of EBITDA and Adjusted EBITDA provides useful information to investors by allowing an understanding of key measures that we use internally for operational decision-making, budgeting, evaluating acquisition targets, and assessing our operating performance.

EBITDA and Adjusted EBITDA are not recognized terms under GAAP and should not be considered as a substitute for net income or any other financial measure presented in accordance with GAAP. These measures have limitations as analytical tools and should not be considered in isolation or as substitutes for analysis of our results as reported under GAAP. We strongly encourage investors to review our 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, same store measures, EBITDA and Adjusted EBITDA, as defined by us, may not be comparable to similarly titled measures reported by other

 


 

companies. It therefore may not be possible to compare our use of these non-GAAP financial measures with those used by other companies.

 

Media Contact

 

Andrew Petro

Matter on behalf of ARKO

(978) 518-4531

apetro@matternow.com

 

Investor Contact

 

Ross Parman
ARKO Corp.
investors@gpminvestments.com

 

 


 

 

Condensed consolidated statements of operations

 

 

 

 

 

 

 

 

For the Three Months
Ended June 30,

 

 

For the Six Months
Ended June 30,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

(in thousands)

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Fuel revenue

$

2,085,854

 

 

$

1,460,763

 

 

$

3,669,380

 

 

$

2,563,710

 

Merchandise revenue

 

431,751

 

 

 

426,365

 

 

 

798,736

 

 

 

785,646

 

Other revenues, net

 

22,658

 

 

 

22,686

 

 

 

44,958

 

 

 

44,814

 

Total revenues

 

2,540,263

 

 

 

1,909,814

 

 

 

4,513,074

 

 

 

3,394,170

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Fuel costs

 

1,955,019

 

 

 

1,347,109

 

 

 

3,425,668

 

 

 

2,359,907

 

Merchandise costs

 

300,387

 

 

 

303,952

 

 

 

559,180

 

 

 

564,706

 

Store operating expenses

 

178,077

 

 

 

154,668

 

 

 

344,615

 

 

 

299,606

 

General and administrative expenses

 

32,956

 

 

 

31,861

 

 

 

64,741

 

 

 

58,574

 

Depreciation and amortization

 

24,353

 

 

 

25,273

 

 

 

48,989

 

 

 

49,515

 

Total operating expenses

 

2,490,792

 

 

 

1,862,863

 

 

 

4,443,193

 

 

 

3,332,308

 

Other expenses, net

 

1,197

 

 

 

1,195

 

 

 

2,318

 

 

 

2,867

 

Operating income

 

48,274

 

 

 

45,756

 

 

 

67,563

 

 

 

58,995

 

Interest and other financial income

 

8,997

 

 

 

2,601

 

 

 

6,710

 

 

 

1,695

 

Interest and other financial expenses

 

(16,336

)

 

 

(14,598

)

 

 

(30,024

)

 

 

(42,309

)

Income before income taxes

 

40,935

 

 

 

33,759

 

 

 

44,249

 

 

 

18,381

 

Income tax expense

 

(9,157

)

 

 

(8,212

)

 

 

(10,162

)

 

 

(7,490

)

Income from equity investment

 

28

 

 

 

26

 

 

 

37

 

 

 

20

 

Net income

$

31,806

 

 

$

25,573

 

 

$

34,124

 

 

$

10,911

 

Less: Net income attributable to non-controlling interests

 

52

 

 

 

54

 

 

 

131

 

 

 

128

 

Net income attributable to ARKO Corp.

$

31,754

 

 

$

25,519

 

 

$

33,993

 

 

$

10,783

 

Series A redeemable preferred stock dividends

 

(1,434

)

 

 

(1,434

)

 

 

(2,852

)

 

 

(2,836

)

Net income attributable to common shareholders

$

30,320

 

 

$

24,085

 

 

$

31,141

 

 

$

7,947

 

Net income per share attributable to common shareholders - basic

$

0.25

 

 

$

0.19

 

 

$

0.25

 

 

$

0.06

 

Net income per share attributable to common shareholders - diluted

$

0.24

 

 

$

0.19

 

 

$

0.25

 

 

$

0.06

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

121,529

 

 

 

124,428

 

 

 

122,909

 

 

 

124,395

 

Diluted

 

130,558

 

 

 

133,032

 

 

 

123,245

 

 

 

124,543

 

 

 


 

 

Condensed consolidated balance sheets

 

 

 

 

 

 

 

 

June 30, 2022

 

 

December 31, 2021

 

 

(in thousands)

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

$

248,518

 

 

$

252,141

 

Restricted cash

 

14,083

 

 

 

20,402

 

Short-term investments

 

33,927

 

 

 

58,807

 

Trade receivables, net

 

93,482

 

 

 

62,342

 

Inventory

 

233,612

 

 

 

197,836

 

Other current assets

 

83,298

 

 

 

92,095

 

Total current assets

 

706,920

 

 

 

683,623

 

Non-current assets:

 

 

 

 

 

Property and equipment, net

 

561,982

 

 

 

548,969

 

Right-of-use assets under operating leases

 

1,043,533

 

 

 

1,064,982

 

Right-of-use assets under financing leases, net

 

188,558

 

 

 

192,378

 

Goodwill

 

197,742

 

 

 

197,648

 

Intangible assets, net

 

176,155

 

 

 

185,993

 

Equity investment

 

3,035

 

 

 

2,998

 

Deferred tax asset

 

40,094

 

 

 

41,047

 

Other non-current assets

 

31,749

 

 

 

24,637

 

Total assets

$

2,949,768

 

 

$

2,942,275

 

Liabilities

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Long-term debt, current portion

$

39,391

 

 

$

40,384

 

Accounts payable

 

221,048

 

 

 

172,918

 

Other current liabilities

 

134,227

 

 

 

137,488

 

Operating leases, current portion

 

54,004

 

 

 

51,261

 

Financing leases, current portion

 

6,037

 

 

 

6,383

 

Total current liabilities

 

454,707

 

 

 

408,434

 

Non-current liabilities:

 

 

 

 

 

Long-term debt, net

 

675,102

 

 

 

676,625

 

Asset retirement obligation

 

58,614

 

 

 

58,021

 

Operating leases

 

1,056,351

 

 

 

1,076,905

 

Financing leases

 

228,800

 

 

 

229,215

 

Deferred tax liability

 

4,264

 

 

 

2,546

 

Other non-current liabilities

 

126,147

 

 

 

136,853

 

Total liabilities

 

2,603,985

 

 

 

2,588,599

 

 

 

 

 

 

 

Series A redeemable preferred stock

 

100,000

 

 

 

100,000

 

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

Common stock

 

12

 

 

 

12

 

Treasury stock

 

(40,038

)

 

 

-

 

Additional paid-in capital

 

223,557

 

 

 

217,675

 

Accumulated other comprehensive income

 

9,119

 

 

 

9,119

 

Retained earnings

 

52,898

 

 

 

26,646

 

Total shareholders' equity

 

245,548

 

 

 

253,452

 

Non-controlling interest

 

235

 

 

 

224

 

Total equity

 

245,783

 

 

 

253,676

 

Total liabilities, redeemable preferred stock and equity

$

2,949,768

 

 

$

2,942,275

 

 

 


 

 

Condensed consolidated statements of cash flows

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months
Ended June 30,

 

 

For the Six Months
Ended June 30,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

(in thousands)

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

 

Net income

$

31,806

 

 

$

25,573

 

 

$

34,124

 

 

$

10,911

 

Adjustments to reconcile net income to net
  cash provided by operating activities:

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

24,353

 

 

 

25,273

 

 

 

48,989

 

 

 

49,515

 

Deferred income taxes

 

5,248

 

 

 

3,952

 

 

 

2,671

 

 

 

2,109

 

Loss (gain) on disposal of assets and impairment charges

 

1,207

 

 

 

(400

)

 

 

1,971

 

 

 

975

 

Foreign currency loss (gain)

 

191

 

 

 

(101

)

 

 

228

 

 

 

(1,143

)

Amortization of deferred financing costs, debt discount and premium

 

628

 

 

 

806

 

 

 

1,262

 

 

 

621

 

Amortization of deferred income

 

(2,214

)

 

 

(1,927

)

 

 

(5,292

)

 

 

(4,411

)

Accretion of asset retirement obligation

 

420

 

 

 

389

 

 

 

829

 

 

 

834

 

Non-cash rent

 

1,791

 

 

 

1,578

 

 

 

3,737

 

 

 

3,349

 

Charges to allowance for credit losses

 

216

 

 

 

181

 

 

 

351

 

 

 

322

 

Income from equity investment

 

(28

)

 

 

(26

)

 

 

(37

)

 

 

(20

)

Share-based compensation

 

3,108

 

 

 

1,488

 

 

 

5,882

 

 

 

2,514

 

Fair value adjustment of financial assets and liabilities

 

(7,799

)

 

 

(1,216

)

 

 

(6,590

)

 

 

9,833

 

Other operating activities, net

 

584

 

 

 

308

 

 

 

707

 

 

 

532

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

Increase in trade receivables

 

(18,605

)

 

 

(10,304

)

 

 

(31,491

)

 

 

(21,102

)

Increase in inventory

 

(14,629

)

 

 

(4,295

)

 

 

(35,947

)

 

 

(11,732

)

(Increase) decrease in other assets

 

(10,608

)

 

 

(12,450

)

 

 

7,607

 

 

 

(4,762

)

Increase in accounts payable

 

26,230

 

 

 

9,651

 

 

 

46,407

 

 

 

26,960

 

(Decrease) increase in other current liabilities

 

(6,763

)

 

 

8,896

 

 

 

(11,324

)

 

 

(6,933

)

Decrease in asset retirement obligation

 

 

 

 

(24

)

 

 

(34

)

 

 

(113

)

Increase in non-current liabilities

 

6,964

 

 

 

389

 

 

 

8,112

 

 

 

758

 

Net cash provided by operating activities

 

42,100

 

 

 

47,741

 

 

 

72,162

 

 

 

59,017

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

 

Purchase of property and equipment

 

(24,501

)

 

 

(15,113

)

 

 

(45,168

)

 

 

(32,638

)

Purchase of intangible assets

 

(125

)

 

 

(175

)

 

 

(125

)

 

 

(175

)

Proceeds from sale of property and equipment

 

328

 

 

 

35,179

 

 

 

7,261

 

 

 

36,059

 

Prepayment for Quarles Acquisition

 

 

 

 

 

 

 

(5,000

)

 

 

 

Business acquisitions, net of cash

 

(107

)

 

 

(93,527

)

 

 

(6,853

)

 

 

(93,527

)

Decrease in investments, net

 

25,491

 

 

 

 

 

 

27,109

 

 

 

 

Repayment of loans to equity investment

 

174

 

 

 

 

 

 

174

 

 

 

 

Net cash provided by (used in) investing activities

 

1,260

 

 

 

(73,636

)

 

 

(22,602

)

 

 

(90,281

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

 

Receipt of long-term debt, net

 

 

 

 

33,941

 

 

 

 

 

 

35,056

 

Repayment of debt

 

(2,936

)

 

 

(26,111

)

 

 

(6,093

)

 

 

(102,074

)

Principal payments on financing leases

 

(1,652

)

 

 

(2,023

)

 

 

(3,304

)

 

 

(4,013

)

Proceeds from failed sale-leaseback

 

 

 

 

43,569

 

 

 

 

 

 

43,569

 

Payment of Additional Consideration

 

(2,085

)

 

 

 

 

 

(2,085

)

 

 

-

 

 

 


 

Payment of merger transaction issuance costs

 

 

 

 

(78

)

 

 

 

 

 

(4,764

)

Common stock repurchased

 

(26,954

)

 

 

 

 

 

(40,038

)

 

 

 

Dividends paid on common stock

 

(2,415

)

 

 

 

 

 

(4,889

)

 

 

 

Dividends paid on redeemable preferred stock

 

(1,434

)

 

 

(1,434

)

 

 

(2,852

)

 

 

(2,993

)

Distributions to non-controlling interests

 

(60

)

 

 

(60

)

 

 

(120

)

 

 

(120

)

Net cash (used in) provided by financing activities

 

(37,536

)

 

 

47,804

 

 

 

(59,381

)

 

 

(35,339

)

Net increase (decrease) in cash and cash equivalents and restricted cash

 

5,824

 

 

 

21,909

 

 

 

(9,821

)

 

 

(66,603

)

Effect of exchange rate on cash and cash equivalents and restricted cash

 

(105

)

 

 

24

 

 

 

(121

)

 

 

(1,438

)

Cash and cash equivalents and restricted cash, beginning of period

 

256,882

 

 

 

223,003

 

 

 

272,543

 

 

 

312,977

 

Cash and cash equivalents and restricted cash, end of period

$

262,601

 

 

$

244,936

 

 

$

262,601

 

 

$

244,936

 

 

 

 

 

 

 

 


 

The following table contains a reconciliation of net income to EBITDA and Adjusted EBITDA for the periods presented:

 

Reconciliation of EBITDA and Adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months
Ended June 30,

 

 

For the Six Months
Ended June 30,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

(in thousands)

 

Net income

$

31,806

 

 

$

25,573

 

 

$

34,124

 

 

$

10,911

 

Interest and other financing expenses, net

 

7,339

 

 

 

11,997

 

 

 

23,314

 

 

 

40,614

 

Income tax expense

 

9,157

 

 

 

8,212

 

 

 

10,162

 

 

 

7,490

 

Depreciation and amortization

 

24,353

 

 

 

25,273