Group 1 - CrossAmerica Partners LP (CAPL) is a distributor of motor fuels and has a Zacks Rank 1, with a Zacks Consensus Estimate for current year earnings increasing by 72.7% over the last 60 days [1] - China Yuchai International Limited (CYD) is a diesel and natural gas engine company with a Zacks Rank 1, and its current year earnings estimate has increased by 19.1% over the last 60 days [2] - CAPL has a dividend yield of 9%, significantly higher than the industry average of 5.7% [2] - CYD has a dividend yield of nearly 2%, compared to the industry average of 0.0% [2]

Company Overview - CrossAmerica Partners LP is a leading wholesale distributor of motor fuels and convenience store operator, formed in 2012 [3] - The company owns or leases approximately 1,100 sites and distributes fuel to around 1,600 locations across 34 states [3] - CrossAmerica Partners has established relationships with major oil brands including ExxonMobil, BP, Shell, Marathon, Valero, and Phillips 66 [3] - It ranks as one of ExxonMobil's largest distributors by fuel volume in the United States and is in the top 10 for additional brands [3] Financial Reporting - On February 27, 2025, CrossAmerica Partners filed its Annual Report on Form 10-K for the fiscal year ended December 31, 2024 [1] - The report includes the Partnership's audited financial statements, which unitholders can request in printed form [2]

Financial Data and Key Metrics Changes - For Q4 2024, net income was $16.9 million, slightly up from $16.7 million in Q4 2023, driven by a net gain of $11.5 million from real estate rationalization and a tax benefit of $1.8 million, offset by lower adjusted EBITDA and increased interest expense [35][36] - Adjusted EBITDA for Q4 2024 was $35.5 million, down 26% from $47.6 million in Q4 2023, primarily due to strong results in the prior year [36][37] - Distributable cash flow for Q4 2024 was $21.1 million, down from $35.8 million in Q4 2023, impacted by lower adjusted EBITDA and higher cash interest expense [37][38] Business Line Data and Key Metrics Changes - Retail segment gross profit increased 5% to $75.1 million in Q4 2024 compared to $69 million in Q4 2023, driven by increased merchandise margin despite a slight decrease in motor fuel gross profit [8][9] - Wholesale segment gross profit declined 22% to $25.9 million in Q4 2024 from $33 million in Q4 2023, due to a decline in both fuel volume and margin per gallon [19][20] - For the full year 2024, retail segment gross profit increased 14% to $289.7 million compared to $253.5 million in 2023, while wholesale segment gross profit decreased 16% to $108.6 million from $128.8 million [23][25] Market Data and Key Metrics Changes - National gasoline demand was down approximately 4% for Q4 2024, while the company's same-store retail volume increased 2%, indicating outperformance relative to the market [11][12] - Inside sales on a same-site basis were up 1% for Q4 2024, with sales excluding cigarettes increasing 2% year over year, outperforming the national demand which was down approximately 1% [14][15] Company Strategy and Development Direction - The company plans to continue optimizing its portfolio and strategically converting sites to retail when appropriate, focusing on providing a great customer experience [32][33] - Significant progress was made on long-term strategic goals, including the conversion of 107 sites to retail, which positions the portfolio for long-term profitability despite short-term volatility [30][31] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a mixed year in 2024, facing challenges from a difficult first quarter and macroeconomic conditions, but highlighted resilience in demand and solid financial performance [29][34] - The company remains committed to executing its strategy while adapting to market conditions to ensure strong results for unitholders [34][52] Other Important Information - The company divested 30 properties for $36.3 million in proceeds during 2024, with a focus on recycling capital to invest in growth opportunities [27][28] - Operating expenses for the full year 2024 increased by $33.2 million or 17% compared to 2023, primarily driven by the conversion of locations to company-operated sites [46][48] Q&A Session Summary - There were no questions during the Q&A session, and the management encouraged participants to reach out later if they had any inquiries [55]

Financial Performance - In 2024, the total gallons of motor fuel distributed decreased to 1,299 million from 1,350 million in 2023, representing a decline of approximately 3.8%[23] - Operating revenues decreased by $288 million (7%) from 2023 to 2024, totaling $4,098,288 thousand[212] - Cost of sales decreased by $304 million (8%), primarily due to lower wholesale volume and lower cost per gallon[214] - Gross profit increased by $16 million (4%), driven by higher merchandise and motor fuel gross profit in the retail segment[215] - Wholesale segment revenues decreased by $418 million (18%) due to a 12% decrease in volume and a 7% decrease in average wholesale selling price[215] - Retail segment revenues increased to $2,226 million in 2024, up from $2,096 million in 2023, reflecting a growth of about 6.2%[27] - Retail segment revenues increased by $130 million (6%), attributed to a 9% increase in volume and a 23% increase in merchandise revenues[215] - The company recorded a net income of $22,453 thousand for 2024, a decrease from $42,592 thousand in 2023[212] Operational Growth - The company operated 365 sites as of December 31, 2024, an increase from 296 sites in 2023, marking a growth of approximately 23.3%[20] - Food and merchandise sales at company operated sites rose to $390 million in 2024, compared to $316 million in 2023, indicating an increase of about 23.4%[23] - The company completed acquisitions for approximately 1,000 fee and leasehold sites and 700 wholesale fuel supply contracts for a total consideration of approximately $1.5 billion since its IPO[41] - As of December 31, 2024, the company owned or leased a total of 1,080 sites, comprising 646 owned and 434 leased locations[184] - In 2024, the company acquired 1 site, while divesting a total of 37 sites, resulting in a net decrease in the number of sites[185] Cash Distribution and Financial Policies - The company aims to increase quarterly cash distributions over time while maintaining leverage discipline[37] - The cash distribution policy intends to distribute at least $0.4375 per unit quarterly, subject to sufficient cash availability after expenses and reserves[125] - The cash distribution policy includes a minimum quarterly distribution of $0.4375 per unit, with a declared distribution of $0.5250 per unit for Q1 2025[193] - If a significant portion of cash available for distribution is distributed, the company's ability to grow and make acquisitions could be limited, relying on external financing sources[130] - The General Partner has limited liability, meaning counterparties can only seek recourse against the company's assets, not the General Partner's assets[129] Risks and Challenges - The company faces risks including insufficient distributable cash from operations to pay quarterly distributions and volatility in crude oil and wholesale motor fuel costs[49] - The ability to make acquisitions on economically acceptable terms is crucial for future growth and increasing distributions to unitholders[54] - The company relies on four principal suppliers for the majority of motor fuel and one principal supplier for merchandise, which poses risks to operations[49] - Changes in consumer behavior and economic conditions could adversely affect business performance and cash available for distribution[49] - A continued shortage of qualified labor could materially impact operations and increase costs, negatively affecting results[75] - Economic disruptions caused by health crises could adversely affect business operations and cash available for distribution to unitholders[72] - The company faces potential liabilities for environmental remediation costs due to contamination at current and former locations, which could be substantial[82] - The company is exposed to risks related to creditworthiness and performance of customers and suppliers, which could lead to fluctuations in cash flows[100] Regulatory and Compliance Issues - The company is subject to extensive government regulations concerning store operations and environmental matters, which may incur significant compliance costs[49] - Compliance with extensive government laws and regulations can have a material adverse effect on operating results and financial condition[76] - Compliance with environmental laws may require significant expenditures, and state trust funds may not fully cover remediation expenses, impacting financial condition[84] - The company is subject to federal, state, and local laws regarding product quality specifications, which could impact sales volume and increase costs[106] - Compliance with evolving data security regulations is costly, and failure to comply could lead to fines and impact financial condition[111] Market and Economic Conditions - General economic conditions, including inflation and higher interest rates, could adversely affect consumer spending and demand for products[66] - Changes in consumer behavior due to economic conditions may lead to decreased spending on motor fuel and convenience merchandise[71] - Significant increases and volatility in wholesale motor fuel costs could lead to lower gross profit dollars, impacting consumer demand and overall financial performance[60] - Seasonal fluctuations typically result in higher revenues during the second and third quarters due to increased consumer demand for motor fuel[61] - The retail motor fuel industry is characterized by intense competition, which can adversely affect margins and overall financial condition[63] Management and Governance - The General Partner and its affiliates may have conflicts of interest that could affect the company’s operations and unitholder interests[50] - The Topper Group, owning all membership interests in the General Partner, has the discretion to modify or revoke the cash distribution policy, potentially reducing distributions to unitholders[126] - The company is dependent on attracting and retaining a strong management team, with potential impacts on business performance if unable to do so[96] - The Board oversees the annual enterprise risk assessment, including cybersecurity threats and technology risks[183] Cybersecurity and Technology - The company has implemented an enterprise-wide information security platform to manage cybersecurity risks[179] - The company conducts regular assessments and tests of its information security program to identify vulnerabilities[180] - The company recognizes the importance of managing material risks associated with cybersecurity threats, including operational risks and data privacy violations[177] Debt and Financing - As of December 31, 2024, the company had total debt of $767.5 million and $68.9 million available under its revolving CAPL Credit Facility[113] - The company’s ability to service its indebtedness depends on future financial and operating performance, which may be affected by economic conditions[113] - A significant increase in interest rates could adversely affect the company's ability to service its indebtedness and increase financing costs[115] - The CAPL Credit Facility contains operating and financial restrictions that may limit the company's ability to finance future operations or capital needs[116] Taxation - Tax treatment as a partnership is crucial; if treated as a corporation, cash available for distribution would be substantially reduced[150][152] - Corporate subsidiaries are subject to a 21% federal tax rate, which will reduce cash available for distribution[155] - Changes in U.S. federal income tax laws could negatively impact the treatment of the partnership and the value of common units[156][157] - Unitholders must pay taxes on their share of income even if no cash distributions are received[159] - Distributions to non-U.S. persons will be subject to U.S. federal withholding taxes at the highest applicable rate[165]

Financial Performance - Reported Q4 2024 Net Income of $16.9 million, a slight increase from $16.7 million in Q4 2023, while Full Year 2024 Net Income decreased to $22.5 million from $42.6 million in 2023[4] - Adjusted EBITDA for Q4 2024 was $35.5 million, down from $47.6 million in Q4 2023, and Full Year 2024 Adjusted EBITDA decreased to $145.5 million from $165.8 million in 2023[4] - Distributable Cash Flow for Q4 2024 was $21.1 million, compared to $35.8 million in Q4 2023, with Full Year 2024 Distributable Cash Flow at $86.0 million, down from $116.7 million in 2023[4] - Total operating revenues for the year ended December 31, 2024, were $4,098,288, a decrease of 6.6% compared to $4,386,263 in 2023[27] - Gross profit for the year ended December 31, 2024, increased to $398,319, up 4.8% from $382,268 in 2023[27] - Net income for the year ended December 31, 2024, was $22,453, a decline of 47.3% from $42,592 in 2023[29] - Operating income for the year ended December 31, 2024, was $70,560, down 20.0% from $88,070 in 2023[27] - Basic earnings per common unit for the year ended December 31, 2024, were $0.52, compared to $1.06 in 2023, reflecting a decrease of 50.0%[27] - Net cash provided by operating activities for the year ended December 31, 2024, was $87,782, down 25.1% from $117,083 in 2023[29] Segment Performance - Retail segment gross profit increased by 9% in Q4 2024 to $75.1 million, while Full Year 2024 gross profit rose 14% to $289.7 million compared to 2023[7][10] - Retail segment motor fuel gallons distributed in Q4 2024 were 141.4 million, a 13.5% increase from 124.5 million in Q4 2023, and Full Year 2024 gallons distributed increased by 9% to 554.5 million[7][11] - The wholesale segment gross profit decreased by 22% in Q4 2024 to $25.9 million, and Full Year 2024 gross profit declined 16% to $108.6 million compared to 2023[13][16] - Operating income for the retail segment decreased to $22,841,000 in Q4 2024 from $29,342,000 in Q4 2023, a decline of 22.3%[31] - Wholesale segment total gross profit decreased to $25,896,000 in Q4 2024, down from $33,039,000 in Q4 2023, a decrease of 21.5%[34] - The volume of gallons sold in the retail segment reached 141,377,000 in Q4 2024, compared to 124,486,000 in Q4 2023, marking a growth of 13.5%[31] - The volume of gallons distributed in the wholesale segment was 180,453,000 in Q4 2024, down from 205,296,000 in Q4 2023, a decline of 12.1%[34] Expenses and Liabilities - Operating expenses for Q4 2024 rose to $59.4 million from $48.7 million in Q4 2023, and Full Year 2024 operating expenses increased to $228.0 million from $194.7 million in 2023[5] - As of December 31, 2024, leverage was 4.36 times, up from 4.21 times at the end of 2023, with $767.5 million outstanding under the CAPL Credit Facility[18] - Total assets decreased to $1,114,725 in 2024, down 5.7% from $1,181,682 in 2023[25] - Total liabilities decreased slightly to $1,139,508 in 2024, compared to $1,150,931 in 2023[25] - Total current assets increased to $118,830 in 2024, up 9.5% from $108,522 in 2023[25] Forward-Looking Statements - The Partnership's management emphasizes that forward-looking statements may differ materially from actual results due to various factors[44] - The company does not undertake any obligation to publicly update or revise forward-looking statements based on new information or future events[44] - Investors are encouraged to review the Partnership's Form 10-K and Forms 10-Q for more information on potential risks[44] - The website www.crossamericapartners.com provides access to the Partnership's filings with the Securities and Exchange Commission[44] - The use of terms like "believe," "expect," and "estimate" indicates forward-looking statements[44] - Actual results could be influenced by factors not currently anticipated by the management[44] - The Partnership's future performance is subject to uncertainties that could impact projections[44] - The management's expectations are based on current market conditions and operational strategies[44] - Stakeholders should consider the cautionary statements when evaluating the Partnership's future outlook[44] - The company aims to provide accurate information but acknowledges the inherent risks in forecasting[44]

Core Insights - CrossAmerica Partners LP reported solid growth in same-store retail gallons and sales for Q4 2024, although overall financial performance did not reach the record levels of the previous year [3][4] - The company made significant progress in converting sites to its retail class of trade and divesting select locations to strengthen its long-term financial position [3][4] - Full-year results were impacted by a challenging first quarter and inflationary pressures on core retail customers, but the company remains confident in its business strength and future growth strategy [3][4] Financial Performance - Q4 2024 net income was $16.9 million, slightly up from $16.7 million in Q4 2023; full-year net income decreased to $22.5 million from $42.6 million in 2023 [4][5] - Adjusted EBITDA for Q4 2024 was $35.5 million, down from $47.6 million in Q4 2023; full-year Adjusted EBITDA decreased to $145.5 million from $165.8 million [4][5] - Distributable Cash Flow for Q4 2024 was $21.1 million, compared to $35.8 million in Q4 2023; full-year Distributable Cash Flow fell to $86.0 million from $116.7 million [4][5] Retail Segment Highlights - Retail segment gross profit for Q4 2024 was $75.1 million, a 9% increase from $69.0 million in Q4 2023; full-year gross profit increased to $289.7 million from $253.5 million [8][10] - Retail segment motor fuel gallons distributed in Q4 2024 were 141.4 million, up from 124.5 million in Q4 2023; same-store motor fuel gallons distributed increased by 2% [8][9] - Merchandise gross profit in the retail segment rose by 27% in Q4 2024, driven by an increase in site count and merchandise sales [8][10] Wholesale Segment Highlights - Wholesale segment gross profit for Q4 2024 was $25.9 million, down 22% from $33.0 million in Q4 2023; full-year gross profit decreased to $108.6 million from $128.8 million [13][14] - The decline in wholesale gross profit was attributed to a decrease in motor fuel and rent gross profit due to site conversions and a net loss of independent dealer contracts [13][14] - Total average site count in the wholesale segment declined by 14% year-over-year, with a 24% decrease in lessee dealer locations [13][14] Divestment Activity - In Q4 2024, CrossAmerica sold eleven sites for $17.3 million, resulting in a net gain of $11.6 million; for the full year, thirty properties were sold for $36.3 million, yielding a net gain of $23.3 million [15] Liquidity and Capital Resources - As of December 31, 2024, CrossAmerica had $767.5 million outstanding under its credit facility, with approximately $68.9 million available for future borrowings [16][17] - Leverage was reported at 4.36 times as of December 31, 2024, compared to 4.21 times a year earlier [17] Distributions - The Board declared a quarterly distribution of $0.5250 per limited partner unit for Q4 2024, paid on February 13, 2025 [18]

Company Overview - CrossAmerica Partners LP is a leading wholesale distributor of motor fuels and convenience store operator, formed in 2012 [4] - The company distributes branded and unbranded petroleum for motor vehicles across approximately 1,600 locations and owns or leases around 1,100 sites [4] - CrossAmerica Partners operates in 34 states and has established relationships with major oil brands including ExxonMobil, BP, Shell, Marathon, Valero, and Phillips 66 [4] - It ranks as one of ExxonMobil's largest distributors by fuel volume in the United States and is in the top 10 for additional brands [4] Upcoming Earnings Announcement - CrossAmerica Partners will release its fourth quarter and full year 2024 earnings results after the market closes on February 26, 2025 [1] - A conference call will be hosted by management on February 27, 2025, at 9:00 a.m. Eastern Time [1] - The conference call can be accessed via phone numbers 800-717-1738 or 646-307-1865 with the passcode 43042 [2] Investor Relations - A live audio webcast of the conference call and related earnings materials will be available on the investor section of the CrossAmerica website on the same day [2] - An archive of the webcast will be accessible within 24 hours after the call for a period of sixty days [3]

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Financial Data and Key Metrics Changes - The company reported net income of $10.7 million for Q3 2024, down from $12.3 million in Q3 2023 [30] - Adjusted EBITDA was $43.9 million, a slight decrease of 1% from $44.2 million in Q3 2023 [30] - Distributable cash flow decreased to $27.1 million from $31.4 million year-over-year, primarily due to increased interest expense and higher sustaining capital spending [31] Business Line Data and Key Metrics Changes - Retail segment gross profit increased by 24% and operating income by 19% year-over-year, driven by site conversions and strong same-store performance [7] - Motor fuel gross profit rose 26%, while merchandise gross profit increased by 20% compared to Q3 2023 [9] - Wholesale segment gross profit declined 16% to $27.6 million, primarily due to a decrease in fuel volume [21] Market Data and Key Metrics Changes - National gasoline demand was down approximately 5% for the quarter, but the company's same-store retail volume outperformed this trend, growing by about 2% in company-operated stores [11] - Same-store volume in the wholesale segment was down approximately 2% year-over-year, outperforming the national demand decline [25] Company Strategy and Development Direction - The company is focused on converting sites from wholesale to retail to enhance exposure to retail fuel margins [20] - The strategy includes increasing the number of company-operated retail sites, which rose by 79 from the previous year [17] - The company aims to optimize performance at newly converted stores while managing operational costs effectively [41] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a soft industry environment with decreased fuel demand but highlighted strong performance in retail margins [8] - The company remains focused on generating durable cash flows and maintaining a strong balance sheet despite ongoing demand challenges [41] Other Important Information - The company divested 9 properties for $7.2 million, resulting in a net gain of $5.3 million, indicating active management of its asset portfolio [27] - Operating expenses increased by $10.2 million year-over-year, driven by the conversion of sites from wholesale to retail [33] Q&A Session Summary - No questions were raised during the Q&A session, and the company encouraged follow-up inquiries if needed [42]

| --- | --- | --- | --- | --- | |-------|-------|--------------------|-------|-------| | | | | | | | | | | | | | | | | | | | | | Third Quarter 2024 | | | | | | | | | | | | | | | | | | Earnings Call | | | | | | November 2024 | | | Third Quarter 2024 Earnings Call November 2024 Forward Looking Statement Statements contained in this presentation that state the Partnership's or management's expectations or predictions of the future are forward-looking statements. The words "believe," "expect," "should," "intend ...