Susser Petroleum Partners (SUSP), a wholesale distributor of motor fuels, reported financial and operating results for the fourth quarter and full year ended Dec. 31, 2013.
Net income for the quarter was $9.5 million, or $0.43 per unit, compared to $8.6 million, or $0.39 per unit, in the fourth quarter of 2012. Adjusted EBITDA totaled $14.1 million and distributable cash flow was $12.6 million, versus $10.8 million and $9.7 million, respectively, in the prior-year period.
Revenue for the fourth quarter totaled $1.1 billion, a 10.3% increase compared to $1.0 billion in the comparable period of 2012, primarily attributable to a 14.7% increase in total fuel gallons sold.
In the fourth quarter of 2013, 64.3% of revenues were generated from fuel sales to affiliates, 35.2% were from fuel sales to third-parties, and 0.5% came from rental and other income.
Gross profit for the quarter totaled $20.0 million, a 37.2% increase compared to gross profit of $14.6 million in the fourth quarter of 2012. The average fuel margin for all gallons sold increased to 3.8 cents per gallon in the fourth quarter of 2013, compared to 3.5 cents per gallon in the prior-year period.
Affiliate customers as of Dec. 31, 2013 include 662 locations under long-term contract, including 575 Stripes convenience stores and consignment arrangements at approximately 87 independently operated convenience stores.
Gallons sold to affiliates during the fourth quarter increased 10% versus the prior-year period to 269.5 million gallons. Gross profit on fuel sold to affiliates totaled $8.1 million versus $7.3 million in the comparable three-month period in 2012, with the margin per gallon at 3.0 cents in each period. As of Jan. 31, following the Sac-N-Pac acquisition, SUSP supplied 709 affiliated sites.
Third-party customers of SUSP include approximately 492 independent dealers under long-term fuel supply agreements, consignment arrangements at 12 independently operated convenience stores and approximately 1,900 commercial customers as of Dec. 31, 2013. Total gallons sold to third parties increased year-over-year by 24.6% to 146 million gallons for the quarter, partly reflecting the Gainesville Fuel business that was contributed to SUSP in September 2013.
Gross profit on fuel sold to these third-party customers was $7.6 million, or 5.2 cents per gallon, compared to $5.3 million, or 4.5 cents per gallon, in the prior-year period.
“We are pleased to report solid results for Susser Petroleum Partners for the fourth quarter and full year 2013, our first full year as a publicly traded partnership,” said Rocky Dewbre, president and CEO. “As a result of this strong performance, we were recently able to announce our third consecutive increase to our quarterly distribution.”
“We continued to see robust growth, with a more than 8% increase in gallons sold and a 38% year-over-year increase in gross profit for the full year. We now own 38 Stripes stores that are leased back to SUSS, and expect to continue this drop-down strategy throughout 2014. In addition, we will continue to pursue accretive acquisition opportunities such as our recently completed purchase of 3W Warren Fuels, the wholesale distributor for 67 fueling locations, including the 47 Sac-N-Pac stores now owned by SUSS. Additionally, we may have the opportunity to purchase some of these stores and lease them to SUSS or independent dealers as SUSS completes its evaluation of the properties over the next 6-18 months.”
SUSP completed the acquisition of three Stripes convenience stores during the fourth quarter of 2013 at a total cost of $11.9 million. So far in the first quarter of 2014, SUSP has acquired five additional Stripes convenience stores for a total of $19.5 million. These properties are being leased back to SUSS. Including the Stripes store purchases, SUSP gross capital expenditures for the fourth quarter were $14.5 million, of which $14.2 million was for growth capital and $0.3 million for maintenance capital.