Filed Pursuant to Rule 424(b)(3)

Registration No. 333-252302

PROSPECTUS SUPPLEMENT NO. 2

(to prospectus dated June 7, 2021)

ARKO Corp.

Up to 99,251,253 Shares of Common Stock

Up to 1,100,000 Shares of Common Stock Issuable Upon Exercise of Warrants

Up to 4,000,000 Warrants

 

 

This prospectus supplement is being filed to update and supplement the information contained in the prospectus dated June 7, 2021 (the “Prospectus”), with the information contained in the Quarterly Report on Form 10-Q, which we filed with the SEC on August 12, 2021 (the “Quarterly Report”). Accordingly, we have attached the Quarterly Report to this prospectus supplement.

The Prospectus and this prospectus supplement relate to the issuance by us of up to an aggregate of up to 1,100,000 shares of our common stock, $0.0001 par value per share (“common stock”), issuable upon exercise of the New Ares Warrants (as defined in the Prospectus), for which we will receive the proceeds from any exercise of any such warrants for cash.

The Prospectus and this prospectus supplement also relate to the resale from time to time by the selling securityholders named in the Prospectus (the “Selling Securityholders”) of up to 99,251,253 shares of our common stock, including (i) the 8,333,333 shares of common stock (the “PIPE Shares”) issuable upon conversion of 1,000,000 shares of our Series A convertible preferred stock, par value 0.0001 per share (the “Series A Convertible Preferred Stock”), (ii) 1,100,000 shares of common stock that may be issued upon exercise of the New Ares Warrants, (iii) 533,333 shares of common stock that may be issued upon exercise of certain of our Public Warrants (as defined below) held by certain Selling Securityholders and (iv) 9,000,000 Founder Shares (as defined in the Prospectus) (including 4,200,000 shares of common stock issuable upon the satisfaction of certain conditions contained in the Business Combination Agreement (the “Deferred Shares”)), and 4,000,000 warrants (the “Private Warrants”) originally issued in a private placement in connection with the initial public offering of Haymaker (as defined in the Prospectus).

This prospectus supplement updates and supplements the information in the Prospectus and is not complete without, and may not be delivered or utilized except in combination with, the Prospectus, including any amendments or supplements thereto. This prospectus supplement should be read in conjunction with the Prospectus and if there is any inconsistency between the information in the Prospectus and this prospectus supplement, you should rely on the information in this prospectus supplement.

Our common stock and the Public Warrants are listed on the Nasdaq Capital Market under the symbols “ARKO” and “ARKOW,” respectively. On August 13, 2021, the closing price of our common stock was $8.30, and the closing price for our publicly traded warrants (the “Public Warrants”) was $1.29.

INVESTING IN OUR SECURITIES INVOLVES RISKS THAT ARE DESCRIBED IN THE “RISK FACTORS” SECTION BEGINNING ON PAGE 5 OF THE PROSPECTUS.


Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued under the Prospectus or determined if the Prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus supplement is August 16, 2021.


 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2021.

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 001-39828

 

img52064531_0.jpg

ARKO Corp.

(Exact Name of Registrant as Specified in Its Charter)

 

 

Delaware

 

85-2784337

(State or Other Jurisdiction of
Incorporation or Organization)

 

(I.R.S. Employer
Identification No.)

 

8565 Magellan Parkway

Suite 400

Richmond, Virginia 23227-1150

(Address of Principal Executive Offices) (Zip Code)

(804) 730-1568

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class

 

Trading Symbol

 

Name of Each Exchange on Which Registered

Common Stock, $0.0001 par value per share

 

ARKO

 

Nasdaq Capital Market

Warrants to purchase common stock

 

ARKOW

 

Nasdaq Capital Market

 

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.    ☒  Yes    ☐  NO

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).    ☒  Yes    ☐  NO

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:

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

 

 

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):   ☐  YES    ☒  NO

As of August 12, 2021, the registrant had 124,427,805 shares of its common stock, par value $0.0001 per share (“common stock”) outstanding.

 

 


Table of Contents

 

TABLE OF CONTENTS

 

 

 

 

Page

PART I. FINANCIAL INFORMATION

 

 

Item 1.

Financial Statements

 

5

 

Condensed Consolidated Balance Sheets as of June 30, 2021 and December 31, 2020 (unaudited)

 

5

 

Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2021 and 2020 (unaudited)

 

6

 

Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2021 and 2020 (unaudited)

 

7

 

Condensed Consolidated Statements of Changes in Equity for the three and six months ended June 30, 2021 and 2020 (unaudited)

 

8

 

Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2021 and 2020 (unaudited)

 

10

 

Notes to Condensed Consolidated Financial Statements (unaudited)

 

13

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

28

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

42

Item 4.

Controls and Procedures

 

44

PART II. OTHER INFORMATION

 

 

Item 1.

Legal Proceedings

 

45

Item 1A.

Risk Factors

 

45

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

45

Item 3.

Defaults Upon Senior Securities

 

45

Item 4.

Mine Safety Disclosures

 

45

Item 5.

Other Information

 

45

Item 6.

Exhibits

 

46

Signatures

 

47

 

 

 

2


Table of Contents

 

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 (the “Securities Act”), 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, including the potential impact of the COVID-19 pandemic on our businesses, operating results, cash flows and/or financial condition. 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, 2020 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:

changes in economic conditions and consumer confidence in the U.S. could materially adversely affect our business;
if we do not make acquisitions on economically acceptable terms, our future growth may be limited;
we may be unable to successfully integrate the operations or otherwise realize the expected benefits from our acquisitions;
our future growth depends on our ability to successfully implement our organic growth strategy, a major part of which consists of remodeling our convenience stores;
labor, raw materials and building supply shortages and price fluctuations in the construction industry could delay or increase the cost of our store remodel program and our maintenance capital expenditures, which could adversely affect our operating results;
significant changes in current consumption of and regulations related to tobacco and nicotine products;
changes in the wholesale prices of motor fuel;
significant changes in demand for fuel-based modes of transportation;
we operate in a highly competitive industry characterized by low entry barriers;
negative events or developments associated with branded motor fuel suppliers;
we depend on four principal suppliers for the majority of our gross fuel purchases and two principal suppliers for merchandise;
a portion of our revenue is generated under fuel supply agreements with independent dealers that must be renegotiated or replaced periodically;
the retail sale, distribution and storage of motor fuels is subject to environmental protection and operational safety laws and regulations that may expose us or our customers to significant costs and liabilities;
business disruption and related risks resulting from the outbreak of COVID-19 or variants of the virus;
failure to comply with applicable laws and regulations;
the failure to recruit or retain qualified personnel;
unfavorable weather conditions;
we may be held liable for fraudulent credit card transactions on our fuel dispensers;
significant disruptions of our or a third party's information technology systems or breaches of our or a third party's data security;
we depend on third-party transportation providers for the transportation of all of our motor fuel;

 

3


Table of Contents

 

our operations present risks which may not be fully covered by insurance;
our variable rate debt;
our credit facilities have substantial restrictions and financial covenants;
the proposed phase out of the London Interbank Offered Rate (“LIBOR”);
we will incur significant increased expenses and administrative burdens as a public company;
we may not be able to timely and effectively implement controls and procedures required by Section 404(a) of the Sarbanes-Oxley Act;
our corporate structure includes Israeli subsidiaries that may have adverse tax consequences and expose us to additional tax liabilities;
the market price and trading volume of our common stock may be volatile and could decline significantly;
if securities or industry analysts do not publish research, publish inaccurate or unfavorable research or cease publishing research about us or the convenience store industry; and
sales of a substantial number of shares of our common stock in the public market.

 

4


Table of Contents

 

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)

 

 

 

June 30, 2021

 

 

December 31, 2020

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

229,399

 

 

$

293,666

 

Restricted cash with respect to bonds

 

 

 

 

 

1,230

 

Restricted cash

 

 

15,537

 

 

 

16,529

 

Trade receivables, net

 

 

67,720

 

 

 

46,940

 

Inventory

 

 

183,113

 

 

 

163,686

 

Other current assets

 

 

90,978

 

 

 

87,355

 

Total current assets

 

 

586,747

 

 

 

609,406

 

Non-current assets:

 

 

 

 

 

 

Property and equipment, net

 

 

545,321

 

 

 

491,513

 

Right-of-use assets under operating leases

 

 

963,503

 

 

 

961,561

 

Right-of-use assets under financing leases, net

 

 

200,587

 

 

 

198,317

 

Goodwill

 

 

174,053

 

 

 

173,937

 

Intangible assets, net

 

 

209,342

 

 

 

218,132

 

Restricted investments

 

 

31,825

 

 

 

31,825

 

Non-current restricted cash with respect to bonds

 

 

 

 

 

1,552

 

Equity investment

 

 

2,697

 

 

 

2,715

 

Deferred tax asset

 

 

39,506

 

 

 

40,655

 

Other non-current assets

 

 

15,804

 

 

 

10,196

 

Total assets

 

$

2,769,385

 

 

$

2,739,809

 

Liabilities

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Long-term debt, current portion

 

$

10,119

 

 

$

40,988

 

Accounts payable

 

 

182,050

 

 

 

155,714

 

Other current liabilities

 

 

117,853

 

 

 

133,637

 

Operating leases, current portion

 

 

50,730

 

 

 

48,878

 

Financing leases, current portion

 

 

7,195

 

 

 

7,834

 

Total current liabilities

 

 

367,947

 

 

 

387,051

 

Non-current liabilities:

 

 

 

 

 

 

Long-term debt, net

 

 

675,588

 

 

 

708,802

 

Asset retirement obligation

 

 

56,035

 

 

 

52,964

 

Operating leases

 

 

980,273

 

 

 

973,695

 

Financing leases

 

 

232,236

 

 

 

226,440

 

Deferred tax liability

 

 

3,737

 

 

 

2,816

 

Other non-current liabilities

 

 

148,680

 

 

 

96,621

 

Total liabilities

 

 

2,464,496

 

 

 

2,448,389

 

Commitments and contingencies - see Note 11

 

 

 

 

 

 

Series A redeemable preferred stock (no par value) - authorized: 1,000 shares; issued and
   outstanding: 1,000 and 1,000 shares, respectively; redemption value: $100,000 and $100,000,
   in the aggregate respectively

 

 

100,000

 

 

 

100,000

 

Shareholders' equity:

 

 

 

 

 

 

Common stock (par value $0.0001) - authorized: 400,000 shares; issued and
   outstanding: 124,428 and 124,132 shares, respectively

 

 

12

 

 

 

12

 

Additional paid-in capital

 

 

214,781

 

 

 

212,103

 

Accumulated other comprehensive income

 

 

9,119

 

 

 

9,119

 

Accumulated deficit

 

 

(18,870

)

 

 

(29,653

)

Total shareholders' equity

 

 

205,042

 

 

 

191,581

 

Non-controlling interest

 

 

(153

)

 

 

(161

)

Total equity

 

 

204,889

 

 

 

191,420

 

Total liabilities, redeemable preferred stock and equity

 

$

2,769,385

 

 

$

2,739,809

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

5


Table of Contents

 

ARKO Corp.

Condensed Consolidated Statements of Operations

(Unaudited, in thousands, except per share data)

 

 

 

For the Three Months
Ended June 30,

 

 

For the Six Months
Ended June 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Fuel revenue

 

$

1,460,763

 

 

$

407,512

 

 

$

2,563,710

 

 

$

970,553

 

Merchandise revenue

 

 

426,365

 

 

 

391,697

 

 

 

785,646

 

 

 

715,376

 

Other revenues, net

 

 

22,686

 

 

 

15,066

 

 

 

44,814

 

 

 

28,226

 

Total revenues

 

 

1,909,814

 

 

 

814,275

 

 

 

3,394,170

 

 

 

1,714,155

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Fuel costs

 

 

1,347,109

 

 

 

316,891

 

 

 

2,359,907

 

 

 

816,694

 

Merchandise costs

 

 

303,952

 

 

 

284,577

 

 

 

564,706

 

 

 

523,668

 

Store operating expenses

 

 

154,668

 

 

 

126,023

 

 

 

299,606

 

 

 

254,853

 

General and administrative expenses

 

 

31,861

 

 

 

20,527

 

 

 

58,574

 

 

 

39,420

 

Depreciation and amortization

 

 

25,273

 

 

 

16,814

 

 

 

49,515

 

 

 

33,885

 

Total operating expenses

 

 

1,862,863

 

 

 

764,832

 

 

 

3,332,308

 

 

 

1,668,520

 

Other expenses, net

 

 

1,195

 

 

 

1,733

 

 

 

2,867

 

 

 

5,909

 

Operating income

 

 

45,756

 

 

 

47,710

 

 

 

58,995

 

 

 

39,726

 

Interest and other financial income

 

 

2,601

 

 

 

412

 

 

 

1,695

 

 

 

1,000

 

Interest and other financial expenses

 

 

(14,598

)

 

 

(12,925

)

 

 

(42,309

)

 

 

(20,164

)

Income before income taxes

 

 

33,759

 

 

 

35,197

 

 

 

18,381

 

 

 

20,562

 

Income tax expense

 

 

(8,212

)

 

 

(2,510

)

 

 

(7,490

)

 

 

(499

)

Income (loss) from equity investment

 

 

26

 

 

 

(178

)

 

 

20

 

 

 

(411

)

Net income

 

$

25,573

 

 

$

32,509

 

 

$

10,911

 

 

$

19,652

 

Less: Net income attributable to non-controlling interests

 

 

54

 

 

 

10,614

 

 

 

128

 

 

 

8,213

 

Net income attributable to ARKO Corp.

 

$

25,519

 

 

$

21,895

 

 

$

10,783

 

 

$

11,439

 

Series A redeemable preferred stock dividends

 

 

(1,434

)

 

 

 

 

 

(2,836

)

 

 

 

Net income attributable to common shareholders

 

$

24,085

 

 

 

 

 

$

7,947

 

 

 

 

Net income per share attributable to common shareholders - basic
   and diluted

 

$

0.19

 

 

$

0.32

 

 

$

0.06

 

 

0.17

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

124,428

 

 

 

69,490

 

 

 

124,395

 

 

 

68,118

 

Diluted

 

 

133,032

 

 

 

69,490

 

 

 

124,543

 

 

 

68,118

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

6


Table of Contents

 

ARKO Corp.

Condensed Consolidated Statements of Comprehensive Income

(Unaudited, in thousands)

 

 

 

For the Three Months
Ended June 30,

 

 

For the Six Months
Ended June 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Net income

 

$

25,573

 

 

$

32,509

 

 

$

10,911

 

 

$

19,652

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

 

 

 

1,704

 

 

 

 

 

 

(5

)

Total other comprehensive income (loss)

 

 

 

 

 

1,704

 

 

 

 

 

 

(5

)

Comprehensive income

 

$

25,573

 

 

$

34,213

 

 

$

10,911

 

 

$

19,647

 

Less: Comprehensive income attributable to non-controlling
   interests

 

 

54

 

 

 

10,614

 

 

 

128

 

 

 

8,213

 

Comprehensive income attributable to ARKO Corp.

 

$

25,519

 

 

$

23,599

 

 

$

10,783

 

 

$

11,434

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

7


Table of Contents

 

ARKO Corp.

Condensed Consolidated Statements of Changes in Equity

(Unaudited, in thousands)

 

 

 

Common Stock

 

 

Additional
Paid-in

 

 

Accumulated
Other
Comprehensive

 

 

Accumulated

 

 

Total
Shareholders'

 

 

Non-
Controlling

 

 

Total

 

 

 

Shares

 

 

Par Value

 

 

Capital

 

 

Income

 

 

Deficit

 

 

Equity

 

 

Interests

 

 

Equity

 

Balance at April 1, 2020

 

 

65,547

 

 

$

6

 

 

$

104,062

 

 

$

2,735

 

 

$

(53,819

)

 

$

52,984

 

 

$

144,535

 

 

$

197,519

 

Share-based compensation

 

 

 

 

 

 

 

 

128

 

 

 

 

 

 

 

 

 

128

 

 

 

 

 

 

128

 

Vesting and exercise of restricted share units

 

 

88

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of rights

 

 

5,749

 

 

 

1

 

 

 

11,324

 

 

 

 

 

 

 

 

 

11,325

 

 

 

 

 

 

11,325

 

Distributions to non-controlling interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,359

)

 

 

(2,359

)

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

1,704

 

 

 

 

 

 

1,704

 

 

 

 

 

 

1,704

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

21,895

 

 

 

21,895

 

 

 

10,614

 

 

 

32,509

 

Balance at June 30, 2020

 

 

71,384

 

 

$

7

 

 

$

115,514

 

 

$

4,439

 

 

$

(31,924

)

 

$

88,036

 

 

$

152,790

 

 

$

240,826

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at April 1, 2021

 

 

124,428

 

 

$

12

 

 

$

214,727

 

 

$

9,119

 

 

$

(44,389

)

 

$

179,469

 

 

$

(147

)

 

$

179,322

 

Share-based compensation

 

 

 

 

 

 

 

 

1,488

 

 

 

 

 

 

 

 

 

1,488

 

 

 

 

 

 

1,488

 

Distributions to non-controlling interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(60

)

 

 

(60

)

Dividends on redeemable preferred stock

 

 

 

 

 

 

 

 

(1,434

)

 

 

 

 

 

 

 

 

(1,434

)

 

 

 

 

 

(1,434

)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

25,519

 

 

 

25,519

 

 

 

54

 

 

 

25,573

 

Balance at June 30, 2021

 

 

124,428

 

 

$

12

 

 

$

214,781

 

 

$

9,119

 

 

$

(18,870

)

 

$

205,042

 

 

$

(153

)

 

$

204,889

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

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Table of Contents

 

ARKO Corp.

Condensed Consolidated Statements of Changes in Equity (cont'd)

(Unaudited, in thousands)

 

 

 

Common Stock

 

 

Additional
Paid-in

 

 

Accumulated
Other
Comprehensive

 

 

Accumulated

 

 

Total
Shareholders'

 

 

Non-
Controlling

 

 

Total

 

 

 

Shares

 

 

Par Value

 

 

Capital

 

 

Income

 

 

Deficit

 

 

Equity

 

 

Interests

 

 

Equity

 

Balance at January 1, 2020

 

 

65,541

 

 

$

6

 

 

$

104,686

 

 

$

4,444

 

 

$

(43,363

)

 

$

65,773

 

 

$

129,117

 

 

$

194,890

 

Share-based compensation

 

 

 

 

 

 

 

 

255

 

 

 

 

 

 

 

 

 

255

 

 

 

 

 

 

255

 

Vesting and exercise of restricted share units

 

 

88

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Conversion of convertible bonds

 

 

6

 

 

 

 

 

 

26

 

 

 

 

 

 

 

 

 

26

 

 

 

 

 

 

26

 

Issuance of rights

 

 

5,749

 

 

 

1

 

 

 

11,324

 

 

 

 

 

 

 

 

 

11,325

 

 

 

 

 

 

11,325

 

Transactions with non-controlling interests

 

 

 

 

 

 

 

 

(777

)

 

 

 

 

 

 

 

 

(777

)

 

 

20,194

 

 

 

19,417

 

Distributions to non-controlling interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,734

)

 

 

(4,734

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(5

)

 

 

 

 

 

(5

)

 

 

 

 

 

(5

)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11,439

 

 

 

11,439

 

 

 

8,213

 

 

 

19,652

 

Balance at June 30, 2020

 

 

71,384

 

 

$

7

 

 

$

115,514

 

 

$

4,439

 

 

$

(31,924

)

 

$

88,036

 

 

$

152,790

 

 

$

240,826

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at January 1, 2021

 

 

124,132

 

 

$

12

 

 

$

212,103

 

 

$

9,119

 

 

$

(29,653

)

 

$

191,581

 

 

$

(161

)

 

$

191,420

 

Share-based compensation

 

 

 

 

 

 

 

 

2,514

 

 

 

 

 

 

 

 

 

2,514

 

 

 

 

 

 

2,514

 

Distributions to non-controlling interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(120

)

 

 

(120

)

Dividends on redeemable preferred stock

 

 

 

 

 

 

 

 

(2,836

)

 

 

 

 

 

 

 

 

(2,836

)

 

 

 

 

 

(2,836

)

Issuance of shares

 

 

296

 

 

 

 

 

 

3,000

 

 

 

 

 

 

 

 

 

3,000

 

 

 

 

 

 

3,000

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10,783

 

 

 

10,783

 

 

 

128

 

 

 

10,911

 

Balance at June 30, 2021

 

 

124,428

 

 

$

12

 

 

$

214,781

 

 

$

9,119

 

 

$

(18,870

)

 

$

205,042

 

 

$

(153

)

 

$

204,889

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

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Table of Contents

 

ARKO Corp.

Condensed Consolidated Statements of Cash Flows

(Unaudited, in thousands)

 

 

 

For the Six Months
Ended June 30,

 

 

 

2021

 

 

2020

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income

 

$

10,911

 

 

$

19,652

 

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

 

 

 

 

 

 

Depreciation and amortization

 

 

49,515

 

 

 

33,885

 

Deferred income taxes

 

 

2,109

 

 

 

(950

)

Loss on disposal of assets and impairment charges

 

 

975

 

 

 

4,382

 

Foreign currency gain

 

 

(1,143

)

 

 

(235

)

Amortization of deferred financing costs, debt discount and premium

 

 

621

 

 

 

1,167

 

Amortization of deferred income

 

 

(4,411

)

 

 

(4,328

)

Accretion of asset retirement obligation

 

 

834

 

 

 

665

 

Non-cash rent

 

 

3,349

 

 

 

3,548

 

Charges to allowance for credit losses

 

 

322

 

 

 

68

 

(Income) loss from equity investment

 

 

(20

)

 

 

411

 

Share-based compensation

 

 

2,514

 

 

 

255

 

Fair value adjustment of financial assets and liabilities

 

 

9,833

 

 

 

 

Other operating activities, net

 

 

532

 

 

 

(204

)

Changes in assets and liabilities:

 

 

 

 

 

 

(Increase) decrease in trade receivables

 

 

(21,102

)

 

 

819

 

(Increase) decrease in inventory

 

 

(11,732

)

 

 

11,895

 

(Increase) decrease in other assets

 

 

(4,762

)

 

 

4,230

 

Increase in accounts payable

 

 

26,960

 

 

 

19,527

 

(Decrease) increase in other current liabilities

 

 

(6,933

)

 

 

5,237

 

Decrease in asset retirement obligation

 

 

(113

)

 

 

(116

)

Increase in non-current liabilities

 

 

758

 

 

 

2,000

 

Net cash provided by operating activities

 

$

59,017

 

 

$

101,908

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

10


Table of Contents

 

ARKO Corp.

Condensed Consolidated Statements of Cash Flows (cont’d)

(Unaudited, in thousands)

 

 

 

For the Six Months
Ended June 30,

 

 

 

2021

 

 

2020

 

Cash flows from investing activities:

 

 

 

 

 

 

Purchase of property and equipment

 

$

(32,638

)

 

$

(20,481

)

Purchase of intangible assets

 

 

(175

)

 

 

(30

)

Proceeds from sale of property and equipment

 

 

36,059

 

 

 

356

 

Business acquisitions, net of cash

 

 

(93,527

)

 

 

(320

)

Loans to equity investment

 

 

 

 

 

(189

)

Net cash used in investing activities

 

 

(90,281

)

 

 

(20,664

)

Cash flows from financing activities:

 

 

 

 

 

 

Lines of credit, net

 

 

 

 

$

(83,041

)

Repayment of related-party loans

 

 

 

 

 

(4,517

)

Buyback of long-term debt

 

 

 

 

 

(1,995

)

Receipt of long-term debt, net

 

 

35,056

 

 

 

156,535

 

Repayment of debt

 

 

(102,074

)

 

 

(54,240

)

Principal payments on financing leases

 

 

(4,013

)

 

 

(4,151

)

Proceeds from failed sale-leaseback

 

 

43,569

 

 

 

 

Proceeds from issuance of rights, net

 

 

 

 

 

11,332

 

Investment of non-controlling interest in subsidiary