Annual report pursuant to Section 13 and 15(d)

SCHEDULE I

v3.24.0.1
SCHEDULE I
12 Months Ended
Dec. 31, 2023
Statement of Financial Position [Abstract]  
SEC Schedule, Article 12-04, Condensed Financial Information of Registrant

SCHEDULE I

ARKO Corp. (Parent Company Only)

Condensed Balance Sheets

(in thousands)

 

 

 

 

As of December 31,

 

 

 

2023

 

 

2022

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

27,220

 

 

$

93,721

 

Other current assets

 

 

11,983

 

 

 

16,168

 

Total current assets

 

 

39,203

 

 

 

109,889

 

Non-current assets:

 

 

 

 

 

 

Investment in subsidiaries

 

 

356,048

 

 

 

312,708

 

Loans to subsidiaries

 

 

450,000

 

 

 

450,000

 

Deferred tax asset

 

 

1,941

 

 

 

2,239

 

Total assets

 

$

847,192

 

 

$

874,836

 

Liabilities

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Long-term debt, current portion

 

$

671

 

 

$

1,145

 

Other current liabilities

 

 

5,896

 

 

 

17,364

 

Total current liabilities

 

 

6,567

 

 

 

18,509

 

Non-current liabilities:

 

 

 

 

 

 

Long-term debt, net

 

 

444,432

 

 

 

443,648

 

Other non-current liabilities

 

 

20,092

 

 

 

31,845

 

Total liabilities

 

$

471,091

 

 

$

494,002

 

 

 

 

 

 

 

Series A redeemable preferred stock

 

 

100,000

 

 

 

100,000

 

 

 

 

 

 

 

Shareholders' equity

 

 

276,101

 

 

 

280,834

 

Total liabilities, redeemable preferred stock and shareholders' equity

 

$

847,192

 

 

$

874,836

 

 

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

 

SCHEDULE I

ARKO Corp. (Parent Company Only)

Condensed Statements of Operations

(in thousands)

 

 

 

For the Year Ended December 31,

 

 

 

2023

 

 

2022

 

 

2021

 

Income:

 

 

 

 

 

 

 

 

 

Income from loans to subsidiaries and other investee

 

$

23,063

 

 

$

23,645

 

 

$

6,016

 

 

 

23,063

 

 

 

23,645

 

 

 

6,016

 

Expenses:

 

 

 

 

 

 

 

 

 

General and administrative

 

 

7,419

 

 

 

7,437

 

 

 

6,152

 

 

 

7,419

 

 

 

7,437

 

 

 

6,152

 

Income (loss) before interest and financial income (expenses)

 

 

15,644

 

 

 

16,208

 

 

 

(136

)

Interest and other financial income

 

 

14,314

 

 

 

1,577

 

 

 

1,005

 

Interest and other financial expenses

 

 

(25,106

)

 

 

(23,641

)

 

 

(10,855

)

Income (loss) before income taxes

 

 

4,852

 

 

 

(5,856

)

 

 

(9,986

)

Income tax (expense) benefit

 

 

(249

)

 

 

3,579

 

 

 

(2,771

)

Equity income from subsidiaries

 

 

29,766

 

 

 

74,024

 

 

 

71,955

 

Net income

 

$

34,369

 

 

$

71,747

 

 

$

59,198

 

Series A redeemable preferred stock dividends

 

 

(5,750

)

 

 

(5,750

)

 

 

(5,735

)

Net income attributable to common shareholders

 

$

28,619

 

 

$

65,997

 

 

$

53,463

 

 

 

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

 

 

SCHEDULE I

ARKO Corp. (Parent Company Only)

Condensed Statements of Cash Flows

(in thousands)

 

 

 

For the Year Ended December 31,

 

 

 

2023

 

 

2022

 

 

2021

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

Net income

 

$

34,369

 

 

$

71,747

 

 

$

59,198

 

Adjustments to reconcile net income to net cash used in operating activities:

 

 

 

 

 

 

 

 

 

Equity income from subsidiaries

 

 

(29,766

)

 

 

(74,024

)

 

 

(71,955

)

Deferred income taxes

 

 

298

 

 

 

(164

)

 

 

519

 

Amortization of deferred financing costs and debt discount

 

 

785

 

 

 

759

 

 

 

152

 

Foreign currency loss (gain) and interest related to intercompany balances

 

 

 

 

 

1,693

 

 

 

(4,656

)

Share-based compensation

 

 

1,172

 

 

 

955

 

 

 

868

 

Fair value adjustment of financial liabilities

 

 

(10,520

)

 

 

(887

)

 

 

5,021

 

Other operating activities, net

 

 

(116

)

 

 

 

 

 

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

 

Decrease (increase) in other current assets

 

 

4,856

 

 

 

(11,542

)

 

 

(1,586

)

(Decrease) increase in other current liabilities

 

 

(2,910

)

 

 

6,752

 

 

 

3,713

 

Net cash used in operating activities

 

$

(1,832

)

 

$

(4,711

)

 

$

(8,726

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

Loans to investees

 

$

 

 

$

 

 

$

(450,000

)

Repayments of loans to subsidiaries and other investees

 

 

 

 

 

40,000

 

 

 

 

Distribution from subsidiary

 

 

 

 

 

28,109

 

 

 

 

Net cash provided by (used in) investing activities

 

 

 

 

 

68,109

 

 

 

(450,000

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

Proceeds from issuance of long-term debt, net

 

 

 

 

 

 

 

 

442,737

 

Payment of merger transaction issuance costs

 

 

 

 

 

 

 

 

(4,773

)

Common stock repurchased

 

 

(33,694

)

 

 

(40,042

)

 

 

 

Dividends paid on common stock

 

 

(14,272

)

 

 

(10,893

)

 

 

 

Dividends paid on redeemable preferred stock

 

 

(5,750

)

 

 

(5,750

)

 

 

(5,892

)

Payment of Ares Put Option

 

 

(9,808

)

 

 

 

 

 

 

Repayment of long-term debt

 

 

(1,145

)

 

 

(1,500

)

 

 

(2,017

)

Net cash (used in) provided by financing activities

 

 

(64,669

)

 

 

(58,185

)

 

 

430,055

 

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

 

 

(66,501

)

 

 

5,213

 

 

 

(28,671

)

Cash and cash equivalents, beginning of year

 

 

93,721

 

 

 

88,508

 

 

 

117,179

 

Cash and cash equivalents, end of year

 

$

27,220

 

 

$

93,721

 

 

$

88,508

 

 

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

 

SCHEDULE I

ARKO Corp. (Parent Company Only)

Condensed Statements of Cash Flows (cont’d)

(in thousands)

 

 

 

For the Year Ended December 31,

 

 

 

2023

 

 

2022

 

 

2021

 

Supplementary cash flow information:

 

 

 

 

 

 

 

 

 

Cash received for interest

 

$

25,623

 

 

$

26,028

 

 

$

1,404

 

Cash paid for interest

 

 

23,089

 

 

 

24,610

 

 

 

14

 

Cash paid for taxes

 

 

 

 

 

735

 

 

 

6,175

 

Supplementary noncash activities:

 

 

 

 

 

 

 

 

 

Prepaid insurance premiums financed through notes payable

 

 

671

 

 

 

1,145

 

 

 

1,765

 

Issuance of shares

 

 

 

 

 

 

 

 

3,000

 

 

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

 

ARKO Corp. (Parent Company Only)

Notes to Condensed Financial Statements

1. General

The condensed financial statements represent the financial information required by SEC Regulation S-X Rule 5-04 for ARKO Corp. (the “Company”), which requires the inclusion of parent company only financial statements if the restricted net assets of consolidated subsidiaries exceed 25% of total consolidated net assets as of the last day of its most recent fiscal year. As of December 31, 2023, the Company’s restricted net assets of its consolidated subsidiary, GPM Investments, LLC (“GPM”), were approximately $747.6 million and exceeded 25% of the Company’s total consolidated net assets. The primary restrictions as of December 31, 2023 were driven by GPM’s financing agreement with PNC which restrict the transfer of non-cash assets from GPM to the Company. This financing agreement also includes restrictions on distributions according to which, among other things, GPM’s ability to distribute is subject to certain conditions as defined in the underlying agreement. For more information about GPM’s financing agreement with PNC, refer to Note 12 to the consolidated financial statements.

2. Summary of Significant Accounting Policies

The accompanying condensed financial statements have been prepared to present the financial position, results of operations and cash flows of the Company on a stand-alone basis as a holding company. Investments in subsidiaries are accounted for using the equity method. The condensed parent company only financial statements should be read in conjunction with the Company's consolidated financial statements.

3. Long-Term Debt

Senior Notes

On October 21, 2021, the Company completed a private offering of $450 million aggregate principal amount of 5.125% Senior Notes due 2029 (the “Senior Notes”), pursuant to a note purchase agreement dated October 14, 2021, by and among the Company, certain of the Company’s wholly owned domestic subsidiaries (the “Guarantors”), and BofA Securities, Inc., as representative of the several initial purchasers named therein. The Senior Notes are guaranteed, on an unsecured senior basis, by all of the Guarantors. Refer to Note 12 to the consolidated financial statements for further details.

Insurance Premium Notes

The debt outstanding related to premium financing agreements are due within one year. Refer to Note 12 to the consolidated financial statements for further details.