c
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to .
Commission file number
(Exact Name of Registrant as Specified in Its Charter)
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(State or Other Jurisdiction of |
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(I.R.S. Employer |
(Address of Principal Executive Offices) (Zip Code)
(
(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class |
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Trading Symbol |
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Name of Each Exchange on Which Registered |
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Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company”
in Rule 12b-2 of the Exchange Act:
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):
As of May 5, 2023, the registrant had
TABLE OF CONTENTS
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Item 1. |
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5 |
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Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022 (unaudited) |
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7 |
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8 |
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Notes to Condensed Consolidated Financial Statements (unaudited) |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
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Item 4. |
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Item 1. |
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Item 1A. |
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Item 2. |
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Item 3. |
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Item 4. |
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39 |
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Item 5. |
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Item 6. |
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40 |
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41 |
2
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains “forward-looking statements,” as that term is defined under the Private Securities Litigation Reform Act of 1995 (“PSLRA”), Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements include statements about our expectations, beliefs or intentions regarding our product development efforts, business, financial condition, results of operations, strategies or prospects. You can identify forward-looking statements by the fact that these statements do not relate strictly to historical or current matters. Rather, forward-looking statements relate to anticipated or expected events, activities, trends or results as of the date they are made. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties that could cause our actual results to differ materially from any future results expressed or implied by the forward-looking statements. Many factors could cause our actual activities or results to differ materially from the activities and results anticipated in forward-looking statements. These factors include those described below and in “Item 1A-Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2022 and this Quarterly Report on Form 10-Q, and described from time to time in our other filings with the Securities and Exchange Commission (the “SEC”). We do not undertake any obligation to update forward-looking statements, except to the extent required by applicable law. We intend that all forward-looking statements be subject to the safe-harbor provisions of the PSLRA. These forward-looking statements are only predictions and reflect our views as of the date they are made with respect to future events and financial performance.
Risks and uncertainties, the occurrence of which could adversely affect our business, include the following:
3
4
PART I. FINANCIAL INFORMATION
Unless the context otherwise requires, all references in this Quarterly Report on Form 10-Q to the “Company,” “ARKO,” “we,” “our,” “ours,” and “us” refer to ARKO Corp., a Delaware corporation, including our consolidated subsidiaries.
Item 1. Financial Statements
ARKO Corp.
Condensed Consolidated Balance Sheets
(Unaudited, in thousands)
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March 31, 2023 |
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December 31, 2022 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Restricted cash |
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Short-term investments |
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Trade receivables, net |
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Inventory |
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Other current assets |
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Total current assets |
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Non-current assets: |
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Property and equipment, net |
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Right-of-use assets under operating leases |
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Right-of-use assets under financing leases, net |
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Goodwill |
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Intangible assets, net |
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Equity investment |
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Deferred tax asset |
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Other non-current assets |
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Total assets |
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$ |
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$ |
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Liabilities |
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Current liabilities: |
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Long-term debt, current portion |
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$ |
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$ |
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Accounts payable |
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Other current liabilities |
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Operating leases, current portion |
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Financing leases, current portion |
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Total current liabilities |
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Non-current liabilities: |
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Long-term debt, net |
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Asset retirement obligation |
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Operating leases |
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Financing leases |
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Other non-current liabilities |
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Total liabilities |
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Series A redeemable preferred stock ( |
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Shareholders' equity: |
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Common stock (par value $ |
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Treasury stock, at cost - |
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Additional paid-in capital |
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Accumulated other comprehensive income |
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Retained earnings |
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Total shareholders' equity |
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Non-controlling interest |
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Total equity |
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Total liabilities, redeemable preferred stock and equity |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
5
ARKO Corp.
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except per share data)
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For the Three Months |
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2023 |
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2022 |
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Revenues: |
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Fuel revenue |
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$ |
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$ |
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Merchandise revenue |
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Other revenues, net |
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Total revenues |
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Operating expenses: |
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Fuel costs |
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Merchandise costs |
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Store operating expenses |
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General and administrative expenses |
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Depreciation and amortization |
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Total operating expenses |
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Other expenses, net |
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Operating income |
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Interest and other financial income |
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Interest and other financial expenses |
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(Loss) income before income taxes |
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Income tax benefit (expense) |
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(Loss) income from equity investment |
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Net (loss) income |
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$ |
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$ |
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Less: Net income attributable to non-controlling interests |
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Net (loss) income attributable to ARKO Corp. |
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$ |
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$ |
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Series A redeemable preferred stock dividends |
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Net (loss) income attributable to common shareholders |
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$ |
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$ |
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Net (loss) income per share attributable to common shareholders - basic |
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$ |
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$ |
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Net loss per share attributable to common shareholders - diluted |
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$ |
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$ |
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Weighted average shares outstanding: |
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Basic |
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Diluted |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
6
ARKO Corp.
Condensed Consolidated Statements of Changes in Equity
(Unaudited, in thousands)
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Common Stock |
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Treasury |
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Additional |
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Accumulated |
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Retained |
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Total |
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Non- |
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Shares |
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Par Value |
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Stock, at Cost |
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Paid-in Capital |
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Comprehensive Income |
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Earnings |
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Shareholders' Equity |
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Controlling Interests |
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Total Equity |
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Balance at January 1, 2022 |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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Share-based compensation |
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— |
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Distributions to non-controlling interests |
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— |
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Dividends on redeemable preferred stock |
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— |
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Dividends declared (2 cents per share) |
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— |
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Common stock repurchased |
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Vesting of restricted share units |
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— |
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— |
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— |
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— |
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Issuance of shares |
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Net income |
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— |
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Balance at March 31, 2022 |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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Balance at January 1, 2023 |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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Share-based compensation |
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— |
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Transactions with non-controlling interests |
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— |
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— |
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— |
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— |
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— |
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— |
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Distributions to non-controlling interests |
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— |
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Dividends on redeemable preferred stock |
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— |
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Dividends declared (3 cents per share) |
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— |
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Common stock repurchased |
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Vesting of restricted share units |
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— |
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— |
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Net (loss) income |
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— |
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Balance at March 31, 2023 |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
7
ARKO Corp.
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
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For the Three Months |
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2023 |
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2022 |
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Cash flows from operating activities: |
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Net (loss) income |
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$ |
( |
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$ |
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Adjustments to reconcile net (loss) income to net cash provided by operating activities: |
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Depreciation and amortization |
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Deferred income taxes |
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Loss on disposal of assets and impairment charges |
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Foreign currency loss |
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Amortization of deferred financing costs and debt discount |
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Amortization of deferred income |
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Accretion of asset retirement obligation |
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Non-cash rent |
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