[10-Q] ARKO Corp. Quarterly Earnings Report
OUTFRONT Media (OUT) Q2-25 10-Q highlights:
Revenue slipped 3.6% YoY to $460.2 m as billboard weakness (-5.9%) outweighed a 2.4% transit uptick. Operating costs were roughly flat and the company booked a $19.8 m restructuring charge tied to a 6% workforce reduction, shrinking operating income 75% to $56.2 m. GAAP EPS fell to $0.10 from $1.08, with last year鈥檚 figure flattered by a $155 m gain on the Canadian divestiture.
YTD revenue is down 3.9% to $850.9 m and OUT swung to a $1.1 m net loss. Operating cash flow held at $100.7 m but cash balances declined 39% to $28.5 m after $43 m of capex, $12.5 m of MTA franchise spend and $105 m of dividends. Short-term borrowings under the A/R facility rose to $70 m; total debt stands at $2.55 bn (5.4% weighted rate) producing 4.8脳 leverage鈥攂elow the 6.0脳 covenant.
No additional impairments were recorded on the challenging MTA contract, though management still expects zero cost recovery. A $0.30 Q3 dividend was declared on 5 Aug. Restructuring is aimed at lowering future SG&A; savings were not yet quantified.
- Cash: $28.5 m
- Net debt: ~${2.53} bn
- Shares outstanding: 167.1 m
- Annualized dividend yield 鈮� 8%
Liquidity: $425 m unused revolver plus $80 m A/R facility capacity.
OUTFRONT Media (OUT) Q2-25 10-Q punti salienti:
I ricavi sono diminuiti del 3,6% su base annua a 460,2 milioni di dollari, poich茅 la debolezza dei cartelloni pubblicitari (-5,9%) ha superato un aumento del 2,4% nel settore del trasporto pubblico. I costi operativi sono rimasti sostanzialmente stabili e l'azienda ha registrato un onere di ristrutturazione di 19,8 milioni di dollari legato a una riduzione del personale del 6%, riducendo il reddito operativo del 75% a 56,2 milioni di dollari. L'EPS GAAP 猫 sceso a 0,10 dollari da 1,08 dollari, con la cifra dell'anno scorso influenzata da un guadagno di 155 milioni di dollari derivante dalla cessione canadese.
I ricavi da inizio anno sono diminuiti del 3,9% a 850,9 milioni di dollari e OUT ha registrato una perdita netta di 1,1 milioni di dollari. Il flusso di cassa operativo si 猫 mantenuto a 100,7 milioni di dollari, ma la liquidit脿 猫 scesa del 39% a 28,5 milioni di dollari dopo investimenti per 43 milioni, 12,5 milioni spesi per la concessione MTA e 105 milioni di dividendi. I prestiti a breve termine sotto la linea di credito A/R sono saliti a 70 milioni; il debito totale 猫 pari a 2,55 miliardi di dollari (tasso medio ponderato del 5,4%), con un leverage di 4,8脳, inferiore al covenant di 6,0脳.
Non sono state registrate ulteriori svalutazioni sul contratto MTA problematico, anche se la direzione prevede ancora nessun recupero dei costi. Il dividendo trimestrale di 0,30 dollari 猫 stato dichiarato il 5 agosto. La ristrutturazione mira a ridurre le future spese SG&A; i risparmi non sono ancora stati quantificati.
- Liquidit脿: 28,5 milioni di dollari
- Debito netto: circa 2,53 miliardi di dollari
- Azioni in circolazione: 167,1 milioni
- Rendimento annuo del dividendo 鈮� 8%
Liquidit脿 disponibile: 425 milioni di dollari di linea di credito inutilizzata pi霉 80 milioni di capacit脿 sulla linea A/R.
Aspectos destacados del 10-Q de OUTFRONT Media (OUT) Q2-25:
Los ingresos cayeron un 3,6% interanual hasta 460,2 millones de d贸lares, ya que la debilidad en vallas publicitarias (-5,9%) super贸 un aumento del 2,4% en el sector de transporte. Los costos operativos se mantuvieron aproximadamente estables y la compa帽铆a registr贸 un cargo por reestructuraci贸n de 19,8 millones de d贸lares vinculado a una reducci贸n del 6% en la plantilla, lo que redujo el ingreso operativo en un 75% hasta 56,2 millones. El BPA GAAP cay贸 a 0,10 d贸lares desde 1,08 d贸lares, siendo la cifra del a帽o pasado favorecida por una ganancia de 155 millones en la desinversi贸n canadiense.
Los ingresos acumulados en el a帽o bajaron un 3,9% hasta 850,9 millones y OUT pas贸 a una p茅rdida neta de 1,1 millones. El flujo de caja operativo se mantuvo en 100,7 millones, pero los saldos de efectivo disminuyeron un 39% hasta 28,5 millones tras 43 millones en CAPEX, 12,5 millones en gastos de franquicia MTA y 105 millones en dividendos. Los pr茅stamos a corto plazo bajo la facilidad de cuentas por cobrar aumentaron a 70 millones; la deuda total es de 2,55 mil millones (tasa ponderada del 5,4%), con un apalancamiento de 4,8脳, por debajo del covenant de 6,0脳.
No se registraron m谩s deterioros en el contrato desafiante con la MTA, aunque la direcci贸n a煤n espera ninguna recuperaci贸n de costos. Se declar贸 un dividendo trimestral de 0,30 d贸lares el 5 de agosto. La reestructuraci贸n apunta a reducir futuros gastos SG&A; los ahorros a煤n no se han cuantificado.
- Efectivo: 28,5 millones
- Deuda neta: ~2,53 mil millones
- Acciones en circulaci贸n: 167,1 millones
- Rentabilidad anualizada del dividendo 鈮� 8%
Liquidez: 425 millones de revolver sin usar m谩s 80 millones de capacidad en la facilidad de cuentas por cobrar.
OUTFRONT Media (OUT) 2025雲� 2攵勱赴 10-Q 欤检殧 雮挫毄:
毵れ稖鞚� 鞝勲厔 霃欔赴 雽�牍� 3.6% 臧愳唽頃� 4鞏� 6,020毵� 雼煬搿�, 鞓レ櫢 甏戧碃韺� 攵�氍胳潣 攵�歆�(-5.9%)鞚� 雽�欷戧祼韱� 攵�氍胳潣 2.4% 靹膘灔靹鸽ゼ 靸侅噭頄堨姷雼堧嫟. 鞓侅梾牍勳毄鞚� 瓯办潣 氤�霃欖澊 鞐嗢棃鞙茧┌, 鞚鸽牓 6% 臧愳稌瓿� 甏�霠悳 1,980毵� 雼煬鞚� 甑“臁办爼 牍勳毄鞚� 氚橃榿頃� 鞓侅梾鞚挫澋鞚� 75% 臧愳唽頃� 5,620毵� 雼煬毳� 旮半頄堨姷雼堧嫟. GAAP 欤茧嫻靾滌澊鞚奠潃 1.08雼煬鞐愳劀 0.10雼煬搿� 頃橂澖頄堨溂氅�, 鞛戨厔 靾橃箻電� 旌愲倶雼� 靷梾 毵り皝鞙茧 鞚疙暅 1鞏� 5,500毵� 雼煬鞚� 鞚挫澋鞚� 氚橃榿霅橃柎 鞛堨棃鞀惦媹雼�.
鞓暣 雸勳爜 毵れ稖鞚� 3.9% 臧愳唽頃� 8鞏� 5,090毵� 雼煬鞚措┌, OUT電� 110毵� 雼煬鞚� 靾滌啇鞁れ潉 旮半頄堨姷雼堧嫟. 鞓侅梾 順勱笀 頋愲鞚� 1鞏� 70毵� 雼煬搿� 鞙犾霅橃棃鞙茧倶, 4,300毵� 雼煬鞚� 靹る箘 韴瀽, 1,250毵� 雼煬鞚� MTA 頂勲灉彀澊歃� 牍勳毄, 1鞏� 500毵� 雼煬鞚� 氚半嫻旮� 歆�旮� 頉� 順勱笀 鞛旍暋鞚� 39% 臧愳唽頃� 2,850毵� 雼煬搿� 欷勳棃鞀惦媹雼�. 毵れ稖毂勱秾 雼措炒 雽�於� 雼赴 彀瀰旮堨潃 7,000毵� 雼煬搿� 歃濌皜頄堨溂氅�, 齑� 攵�毂勲姅 25鞏� 5,000毵� 雼煬(臧�欷戫弶攴� 鞚挫瀽鞙� 5.4%)搿� 霠堧矂毽 牍勳湪鞚� 4.8氚半, 6.0氚� 鞎届爼 頃滊弰 鞚错晿鞛呺媹雼�.
鞏措牑鞖� MTA 瓿勳暯鞐� 雽�頃� 於旉皜 靻愳儊彀啇鞚� 鞐嗢棃鞙茧倶, 瓴届榿歆勳潃 牍勳毄 須岆车鞚� 鞐嗢潉 瓴冹溂搿� 鞓堨儊頃橁碃 鞛堨姷雼堧嫟. 3攵勱赴 氚半嫻旮堨潃 8鞗� 5鞚检棎 欤茧嫻 0.30雼煬搿� 靹犾柛霅橃棃鞀惦媹雼�. 甑“臁办爼鞚� 氙鸽灅 SG&A 牍勳毄 鞝堦皭鞚� 氇╉憸搿� 頃橂┌, 鞝堦皭鞎§潃 鞎勳 靷办爼霅橃 鞎婌晿鞀惦媹雼�.
- 順勱笀: 2,850毵� 雼煬
- 靾滊秬毂�: 鞎� 25鞏� 3,000毵� 雼煬
- 氚滍枆 欤检嫕 靾�: 1鞏� 6,710毵� 欤�
- 鞐绊櫂靷� 氚半嫻 靾橃澋毳� 鈮� 8%
鞙犽彊靹�: 氙胳偓鞖� 毽臣氩� 4鞏� 2,500毵� 雼煬 氚� 毵れ稖毂勱秾 雼措炒 雽�於� 8,000毵� 雼煬 臧�電�.
Points cl茅s du rapport 10-Q du 2e trimestre 2025 d'OUTFRONT Media (OUT) :
Le chiffre d'affaires a recul茅 de 3,6 % en glissement annuel pour atteindre 460,2 millions de dollars, la faiblesse des panneaux d'affichage (-5,9 %) ayant compens茅 une hausse de 2,4 % dans le secteur des transports. Les co没ts d'exploitation sont rest茅s globalement stables et la soci茅t茅 a enregistr茅 une charge de restructuration de 19,8 millions de dollars li茅e 脿 une r茅duction de 6 % des effectifs, ce qui a fait chuter le r茅sultat op茅rationnel de 75 % 脿 56,2 millions de dollars. Le BPA selon les normes GAAP est pass茅 de 1,08 $ 脿 0,10 $, le chiffre de l'an dernier ayant 茅t茅 gonfl茅 par un gain de 155 millions de dollars li茅 脿 la cession canadienne.
Le chiffre d'affaires cumul茅 depuis le d茅but de l'ann茅e est en baisse de 3,9 % 脿 850,9 millions de dollars et OUT a enregistr茅 une perte nette de 1,1 million de dollars. Le flux de tr茅sorerie op茅rationnel est rest茅 stable 脿 100,7 millions de dollars, mais les liquidit茅s ont diminu茅 de 39 % 脿 28,5 millions apr猫s 43 millions de d茅penses en immobilisations, 12,5 millions en frais de franchise MTA et 105 millions de dividendes. Les emprunts 脿 court terme sous la facilit茅 de comptes clients ont augment茅 脿 70 millions ; la dette totale s'茅l猫ve 脿 2,55 milliards de dollars (taux pond茅r茅 de 5,4 %), avec un levier de 4,8脳, en dessous du covenant de 6,0脳.
Aucune autre d茅pr茅ciation n'a 茅t茅 enregistr茅e sur le contrat MTA difficile, bien que la direction s'attende toujours 脿 une absence de r茅cup茅ration des co没ts. Un dividende trimestriel de 0,30 $ a 茅t茅 d茅clar茅 le 5 ao没t. La restructuration vise 脿 r茅duire les frais SG&A futurs ; les 茅conomies n'ont pas encore 茅t茅 quantifi茅es.
- Tr茅sorerie : 28,5 millions de dollars
- Dette nette : ~2,53 milliards de dollars
- Actions en circulation : 167,1 millions
- Rendement annuel du dividende 鈮� 8 %
Liquidit茅s : ligne de cr茅dit renouvelable inutilis茅e de 425 millions de dollars plus une capacit茅 de 80 millions de dollars sur la facilit茅 de comptes clients.
OUTFRONT Media (OUT) Q2-25 10-Q Highlights:
Der Umsatz sank im Jahresvergleich um 3,6 % auf 460,2 Mio. USD, da die Schw盲che bei Plakatw盲nden (-5,9 %) den Anstieg im Transitbereich um 2,4 % 眉bertraf. Die Betriebskosten blieben weitgehend stabil, und das Unternehmen verbuchte eine Restrukturierungsaufwendung von 19,8 Mio. USD im Zusammenhang mit einer 6%igen Reduzierung der Belegschaft, wodurch das Betriebsergebnis um 75 % auf 56,2 Mio. USD schrumpfte. Das GAAP-Ergebnis je Aktie fiel von 1,08 USD auf 0,10 USD, wobei die Zahl des Vorjahres durch einen Gewinn von 155 Mio. USD aus dem kanadischen Verkauf verzerrt war.
Der Umsatz seit Jahresbeginn ist um 3,9 % auf 850,9 Mio. USD gesunken, und OUT verzeichnete einen Nettogewinn von -1,1 Mio. USD. Der operative Cashflow blieb bei 100,7 Mio. USD, aber die Barbest盲nde sanken um 39 % auf 28,5 Mio. USD nach Investitionen von 43 Mio., 12,5 Mio. f眉r die MTA-Franchise und 105 Mio. an Dividenden. Kurzfristige Kredite unter der Forderungsfinanzierung stiegen auf 70 Mio.; die Gesamtverschuldung betr盲gt 2,55 Mrd. USD (gewichteter Zinssatz 5,4 %) bei einer Verschuldungsquote von 4,8脳 鈥� unter dem Covenant von 6,0脳.
Es wurden keine weiteren Wertminderungen im herausfordernden MTA-Vertrag verbucht, obwohl das Management weiterhin keine Kostenr眉ckgewinnung erwartet. Eine Quartalsdividende von 0,30 USD wurde am 5. August angek眉ndigt. Die Restrukturierung zielt darauf ab, zuk眉nftige SG&A-Kosten zu senken; Einsparungen wurden noch nicht quantifiziert.
- Barmittel: 28,5 Mio. USD
- Nettoverbindlichkeiten: ca. 2,53 Mrd. USD
- Ausstehende Aktien: 167,1 Mio.
- J盲hrliche Dividendenrendite 鈮� 8 %
Liquidit盲t: 425 Mio. USD ungenutzte revolvierende Kreditlinie plus 80 Mio. USD Kapazit盲t der Forderungsfinanzierung.
- $0.30/share dividend maintained and next payment declared for 30 Sep 2025.
- Leverage at 4.8脳 remains well below the 6.0脳 covenant, preserving financial flexibility.
- Operating cash flow $100.7 m essentially flat YoY despite revenue softness.
- No new MTA impairments, easing concern over additional write-downs.
- Revenue down 3.6% YoY with billboard segment 鈭�5.9%, signalling demand weakness.
- Operating income fell 75% to $56.2 m due to restructuring and lower sales.
- Cash balance dropped 39% to $28.5 m while short-term debt rose to $70 m.
- YTD swung to $1.1 m net loss versus $149.6 m profit last year.
- $19.8 m restructuring charge highlights structural cost pressure.
Insights
TL;DR: Declining revenue, restructuring costs and rising leverage overshadow minimal profit.
Q2 shows the core billboard business still contracting and restructuring charges eroding margins. While management avoided new MTA impairments and stayed within covenants, cash burn, higher A/R borrowings and a swing to YTD loss signal pressure on payout sustainability. Investors should watch post-layoff cost savings, ad demand trends and refinancing risk with $400 m term loan due 2026.
TL;DR: Dividend intact, leverage manageable, but growth catalysts limited.
OUT maintains a $0.30 quarterly dividend and sits comfortably inside leverage covenants, giving income investors near-term comfort. Positive free cash flow and unused revolver capacity support liquidity. However, modest top-line declines, limited billboard pricing power and continued MTA drag curb AFFO growth prospects. I classify the filing as neutral: stable but lacking clear upside drivers beyond cost cuts.
OUTFRONT Media (OUT) Q2-25 10-Q punti salienti:
I ricavi sono diminuiti del 3,6% su base annua a 460,2 milioni di dollari, poich茅 la debolezza dei cartelloni pubblicitari (-5,9%) ha superato un aumento del 2,4% nel settore del trasporto pubblico. I costi operativi sono rimasti sostanzialmente stabili e l'azienda ha registrato un onere di ristrutturazione di 19,8 milioni di dollari legato a una riduzione del personale del 6%, riducendo il reddito operativo del 75% a 56,2 milioni di dollari. L'EPS GAAP 猫 sceso a 0,10 dollari da 1,08 dollari, con la cifra dell'anno scorso influenzata da un guadagno di 155 milioni di dollari derivante dalla cessione canadese.
I ricavi da inizio anno sono diminuiti del 3,9% a 850,9 milioni di dollari e OUT ha registrato una perdita netta di 1,1 milioni di dollari. Il flusso di cassa operativo si 猫 mantenuto a 100,7 milioni di dollari, ma la liquidit脿 猫 scesa del 39% a 28,5 milioni di dollari dopo investimenti per 43 milioni, 12,5 milioni spesi per la concessione MTA e 105 milioni di dividendi. I prestiti a breve termine sotto la linea di credito A/R sono saliti a 70 milioni; il debito totale 猫 pari a 2,55 miliardi di dollari (tasso medio ponderato del 5,4%), con un leverage di 4,8脳, inferiore al covenant di 6,0脳.
Non sono state registrate ulteriori svalutazioni sul contratto MTA problematico, anche se la direzione prevede ancora nessun recupero dei costi. Il dividendo trimestrale di 0,30 dollari 猫 stato dichiarato il 5 agosto. La ristrutturazione mira a ridurre le future spese SG&A; i risparmi non sono ancora stati quantificati.
- Liquidit脿: 28,5 milioni di dollari
- Debito netto: circa 2,53 miliardi di dollari
- Azioni in circolazione: 167,1 milioni
- Rendimento annuo del dividendo 鈮� 8%
Liquidit脿 disponibile: 425 milioni di dollari di linea di credito inutilizzata pi霉 80 milioni di capacit脿 sulla linea A/R.
Aspectos destacados del 10-Q de OUTFRONT Media (OUT) Q2-25:
Los ingresos cayeron un 3,6% interanual hasta 460,2 millones de d贸lares, ya que la debilidad en vallas publicitarias (-5,9%) super贸 un aumento del 2,4% en el sector de transporte. Los costos operativos se mantuvieron aproximadamente estables y la compa帽铆a registr贸 un cargo por reestructuraci贸n de 19,8 millones de d贸lares vinculado a una reducci贸n del 6% en la plantilla, lo que redujo el ingreso operativo en un 75% hasta 56,2 millones. El BPA GAAP cay贸 a 0,10 d贸lares desde 1,08 d贸lares, siendo la cifra del a帽o pasado favorecida por una ganancia de 155 millones en la desinversi贸n canadiense.
Los ingresos acumulados en el a帽o bajaron un 3,9% hasta 850,9 millones y OUT pas贸 a una p茅rdida neta de 1,1 millones. El flujo de caja operativo se mantuvo en 100,7 millones, pero los saldos de efectivo disminuyeron un 39% hasta 28,5 millones tras 43 millones en CAPEX, 12,5 millones en gastos de franquicia MTA y 105 millones en dividendos. Los pr茅stamos a corto plazo bajo la facilidad de cuentas por cobrar aumentaron a 70 millones; la deuda total es de 2,55 mil millones (tasa ponderada del 5,4%), con un apalancamiento de 4,8脳, por debajo del covenant de 6,0脳.
No se registraron m谩s deterioros en el contrato desafiante con la MTA, aunque la direcci贸n a煤n espera ninguna recuperaci贸n de costos. Se declar贸 un dividendo trimestral de 0,30 d贸lares el 5 de agosto. La reestructuraci贸n apunta a reducir futuros gastos SG&A; los ahorros a煤n no se han cuantificado.
- Efectivo: 28,5 millones
- Deuda neta: ~2,53 mil millones
- Acciones en circulaci贸n: 167,1 millones
- Rentabilidad anualizada del dividendo 鈮� 8%
Liquidez: 425 millones de revolver sin usar m谩s 80 millones de capacidad en la facilidad de cuentas por cobrar.
OUTFRONT Media (OUT) 2025雲� 2攵勱赴 10-Q 欤检殧 雮挫毄:
毵れ稖鞚� 鞝勲厔 霃欔赴 雽�牍� 3.6% 臧愳唽頃� 4鞏� 6,020毵� 雼煬搿�, 鞓レ櫢 甏戧碃韺� 攵�氍胳潣 攵�歆�(-5.9%)鞚� 雽�欷戧祼韱� 攵�氍胳潣 2.4% 靹膘灔靹鸽ゼ 靸侅噭頄堨姷雼堧嫟. 鞓侅梾牍勳毄鞚� 瓯办潣 氤�霃欖澊 鞐嗢棃鞙茧┌, 鞚鸽牓 6% 臧愳稌瓿� 甏�霠悳 1,980毵� 雼煬鞚� 甑“臁办爼 牍勳毄鞚� 氚橃榿頃� 鞓侅梾鞚挫澋鞚� 75% 臧愳唽頃� 5,620毵� 雼煬毳� 旮半頄堨姷雼堧嫟. GAAP 欤茧嫻靾滌澊鞚奠潃 1.08雼煬鞐愳劀 0.10雼煬搿� 頃橂澖頄堨溂氅�, 鞛戨厔 靾橃箻電� 旌愲倶雼� 靷梾 毵り皝鞙茧 鞚疙暅 1鞏� 5,500毵� 雼煬鞚� 鞚挫澋鞚� 氚橃榿霅橃柎 鞛堨棃鞀惦媹雼�.
鞓暣 雸勳爜 毵れ稖鞚� 3.9% 臧愳唽頃� 8鞏� 5,090毵� 雼煬鞚措┌, OUT電� 110毵� 雼煬鞚� 靾滌啇鞁れ潉 旮半頄堨姷雼堧嫟. 鞓侅梾 順勱笀 頋愲鞚� 1鞏� 70毵� 雼煬搿� 鞙犾霅橃棃鞙茧倶, 4,300毵� 雼煬鞚� 靹る箘 韴瀽, 1,250毵� 雼煬鞚� MTA 頂勲灉彀澊歃� 牍勳毄, 1鞏� 500毵� 雼煬鞚� 氚半嫻旮� 歆�旮� 頉� 順勱笀 鞛旍暋鞚� 39% 臧愳唽頃� 2,850毵� 雼煬搿� 欷勳棃鞀惦媹雼�. 毵れ稖毂勱秾 雼措炒 雽�於� 雼赴 彀瀰旮堨潃 7,000毵� 雼煬搿� 歃濌皜頄堨溂氅�, 齑� 攵�毂勲姅 25鞏� 5,000毵� 雼煬(臧�欷戫弶攴� 鞚挫瀽鞙� 5.4%)搿� 霠堧矂毽 牍勳湪鞚� 4.8氚半, 6.0氚� 鞎届爼 頃滊弰 鞚错晿鞛呺媹雼�.
鞏措牑鞖� MTA 瓿勳暯鞐� 雽�頃� 於旉皜 靻愳儊彀啇鞚� 鞐嗢棃鞙茧倶, 瓴届榿歆勳潃 牍勳毄 須岆车鞚� 鞐嗢潉 瓴冹溂搿� 鞓堨儊頃橁碃 鞛堨姷雼堧嫟. 3攵勱赴 氚半嫻旮堨潃 8鞗� 5鞚检棎 欤茧嫻 0.30雼煬搿� 靹犾柛霅橃棃鞀惦媹雼�. 甑“臁办爼鞚� 氙鸽灅 SG&A 牍勳毄 鞝堦皭鞚� 氇╉憸搿� 頃橂┌, 鞝堦皭鞎§潃 鞎勳 靷办爼霅橃 鞎婌晿鞀惦媹雼�.
- 順勱笀: 2,850毵� 雼煬
- 靾滊秬毂�: 鞎� 25鞏� 3,000毵� 雼煬
- 氚滍枆 欤检嫕 靾�: 1鞏� 6,710毵� 欤�
- 鞐绊櫂靷� 氚半嫻 靾橃澋毳� 鈮� 8%
鞙犽彊靹�: 氙胳偓鞖� 毽臣氩� 4鞏� 2,500毵� 雼煬 氚� 毵れ稖毂勱秾 雼措炒 雽�於� 8,000毵� 雼煬 臧�電�.
Points cl茅s du rapport 10-Q du 2e trimestre 2025 d'OUTFRONT Media (OUT) :
Le chiffre d'affaires a recul茅 de 3,6 % en glissement annuel pour atteindre 460,2 millions de dollars, la faiblesse des panneaux d'affichage (-5,9 %) ayant compens茅 une hausse de 2,4 % dans le secteur des transports. Les co没ts d'exploitation sont rest茅s globalement stables et la soci茅t茅 a enregistr茅 une charge de restructuration de 19,8 millions de dollars li茅e 脿 une r茅duction de 6 % des effectifs, ce qui a fait chuter le r茅sultat op茅rationnel de 75 % 脿 56,2 millions de dollars. Le BPA selon les normes GAAP est pass茅 de 1,08 $ 脿 0,10 $, le chiffre de l'an dernier ayant 茅t茅 gonfl茅 par un gain de 155 millions de dollars li茅 脿 la cession canadienne.
Le chiffre d'affaires cumul茅 depuis le d茅but de l'ann茅e est en baisse de 3,9 % 脿 850,9 millions de dollars et OUT a enregistr茅 une perte nette de 1,1 million de dollars. Le flux de tr茅sorerie op茅rationnel est rest茅 stable 脿 100,7 millions de dollars, mais les liquidit茅s ont diminu茅 de 39 % 脿 28,5 millions apr猫s 43 millions de d茅penses en immobilisations, 12,5 millions en frais de franchise MTA et 105 millions de dividendes. Les emprunts 脿 court terme sous la facilit茅 de comptes clients ont augment茅 脿 70 millions ; la dette totale s'茅l猫ve 脿 2,55 milliards de dollars (taux pond茅r茅 de 5,4 %), avec un levier de 4,8脳, en dessous du covenant de 6,0脳.
Aucune autre d茅pr茅ciation n'a 茅t茅 enregistr茅e sur le contrat MTA difficile, bien que la direction s'attende toujours 脿 une absence de r茅cup茅ration des co没ts. Un dividende trimestriel de 0,30 $ a 茅t茅 d茅clar茅 le 5 ao没t. La restructuration vise 脿 r茅duire les frais SG&A futurs ; les 茅conomies n'ont pas encore 茅t茅 quantifi茅es.
- Tr茅sorerie : 28,5 millions de dollars
- Dette nette : ~2,53 milliards de dollars
- Actions en circulation : 167,1 millions
- Rendement annuel du dividende 鈮� 8 %
Liquidit茅s : ligne de cr茅dit renouvelable inutilis茅e de 425 millions de dollars plus une capacit茅 de 80 millions de dollars sur la facilit茅 de comptes clients.
OUTFRONT Media (OUT) Q2-25 10-Q Highlights:
Der Umsatz sank im Jahresvergleich um 3,6 % auf 460,2 Mio. USD, da die Schw盲che bei Plakatw盲nden (-5,9 %) den Anstieg im Transitbereich um 2,4 % 眉bertraf. Die Betriebskosten blieben weitgehend stabil, und das Unternehmen verbuchte eine Restrukturierungsaufwendung von 19,8 Mio. USD im Zusammenhang mit einer 6%igen Reduzierung der Belegschaft, wodurch das Betriebsergebnis um 75 % auf 56,2 Mio. USD schrumpfte. Das GAAP-Ergebnis je Aktie fiel von 1,08 USD auf 0,10 USD, wobei die Zahl des Vorjahres durch einen Gewinn von 155 Mio. USD aus dem kanadischen Verkauf verzerrt war.
Der Umsatz seit Jahresbeginn ist um 3,9 % auf 850,9 Mio. USD gesunken, und OUT verzeichnete einen Nettogewinn von -1,1 Mio. USD. Der operative Cashflow blieb bei 100,7 Mio. USD, aber die Barbest盲nde sanken um 39 % auf 28,5 Mio. USD nach Investitionen von 43 Mio., 12,5 Mio. f眉r die MTA-Franchise und 105 Mio. an Dividenden. Kurzfristige Kredite unter der Forderungsfinanzierung stiegen auf 70 Mio.; die Gesamtverschuldung betr盲gt 2,55 Mrd. USD (gewichteter Zinssatz 5,4 %) bei einer Verschuldungsquote von 4,8脳 鈥� unter dem Covenant von 6,0脳.
Es wurden keine weiteren Wertminderungen im herausfordernden MTA-Vertrag verbucht, obwohl das Management weiterhin keine Kostenr眉ckgewinnung erwartet. Eine Quartalsdividende von 0,30 USD wurde am 5. August angek眉ndigt. Die Restrukturierung zielt darauf ab, zuk眉nftige SG&A-Kosten zu senken; Einsparungen wurden noch nicht quantifiziert.
- Barmittel: 28,5 Mio. USD
- Nettoverbindlichkeiten: ca. 2,53 Mrd. USD
- Ausstehende Aktien: 167,1 Mio.
- J盲hrliche Dividendenrendite 鈮� 8 %
Liquidit盲t: 425 Mio. USD ungenutzte revolvierende Kreditlinie plus 80 Mio. USD Kapazit盲t der Forderungsfinanzierung.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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)
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(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
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Name of Each Exchange on Which Registered |
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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 (§ 232.405 of this chapter) 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, a 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) ☐ YES
As of August 4, 2025, the registrant had
Table of Contents
TABLE OF CONTENTS
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PART I. FINANCIAL INFORMATION |
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Item 1. |
Financial Statements |
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Condensed Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024 (unaudited) |
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Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2025 and 2024 (unaudited) |
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Condensed Consolidated Statements of Changes in Equity for the three and six months ended June 30, 2025 and 2024 (unaudited) |
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Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2025 and 2024 (unaudited) |
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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. |
Quantitative and Qualitative Disclosures About Market Risk |
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Item 4. |
Controls and Procedures |
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PART II. OTHER INFORMATION |
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Item 1. |
Legal Proceedings |
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Item 1A. |
Risk Factors |
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Item 2. |
Unregistered Sales of Equity Securities, and Use of Proceeds |
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Item 3. |
Defaults Upon Senior Securities |
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Item 4. |
Mine Safety Disclosures |
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Item 5. |
Other Information |
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Item 6. |
Exhibits |
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Signatures |
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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 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, 2024 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:
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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, except share data)
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June 30, 2025 |
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December 31, 2024 |
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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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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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Liabilities |
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Current liabilities: |
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Long-term debt, current portion |
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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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Total liabilities, redeemable preferred stock and equity |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
5
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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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2024 |
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Revenues: |
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Fuel revenue 1 |
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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 1 |
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Merchandise costs |
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Site 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 (income) 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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Income before income taxes |
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Income tax expense |
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Income from equity investment |
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Net income attributable to ARKO Corp. |
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$ |
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$ |
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$ |
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$ |
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Series A redeemable preferred stock dividends |
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Net income attributable to common shareholders |
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$ |
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$ |
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$ |
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$ |
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Net income per share attributable to common shareholders – basic |
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$ |
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$ |
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$ |
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$ |
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Net income per share attributable to common shareholders – diluted |
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$ |
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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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Supplemental information: |
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1 Includes excise tax of: |
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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.
6
Table of Contents
ARKO Corp.
Condensed Consolidated Statements of Changes in Equity
(Unaudited, in thousands, except share data)
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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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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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Balance at April 1, 2024 |
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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 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Dividends on redeemable preferred stock |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||||
Dividends declared (3 cents per share) |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||||
Common stock repurchased |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
||||
Vesting and settlement of restricted share units |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
||||||
Net income |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance at June 30, 2024 |
|
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Balance at April 1, 2025 |
|
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Share-based compensation |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Dividends on redeemable preferred stock |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||||
Dividends declared (3 cents per share) |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||||
Common stock repurchased |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
||||
Vesting and settlement of restricted share units |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net income |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance at June 30, 2025 |
|
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
|
|
Common Stock |
|
|
Treasury |
|
|
Additional |
|
|
Accumulated |
|
|
Retained |
|
|
Total |
|
|
Non- |
|
|
|
|
||||||||||||
|
|
Shares |
|
|
Par Value |
|
|
Stock, at Cost |
|
|
Paid-in Capital |
|
|
Comprehensive Income |
|
|
Earnings |
|
|
Shareholders' Equity |
|
|
Controlling Interests |
|
|
Total Equity |
|
|||||||||
Balance at January 1, 2024 |
|
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Share-based compensation |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Transactions with non-controlling interests |
|
|
— |
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
||||
Dividends on redeemable preferred stock |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|||||
Dividends declared (6 cents per share) |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|||||
Common stock repurchased |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|||||
Vesting and settlement of restricted share units |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Issuance of shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net income |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Balance at June 30, 2024 |
|
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance at January 1, 2025 |
|
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Share-based compensation |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Dividends on redeemable preferred stock |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|||||
Dividends declared (6 cents per share) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Common stock repurchased |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|||||
Vesting and settlement of restricted share units |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net income |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Balance at June 30, 2025 |
|
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
7
Table of Contents
ARKO Corp.
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
|
|
For the Six Months |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net income |
|
$ |
|
|
$ |
|
||
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
|
||
Deferred income taxes |
|
|
( |
) |
|
|
( |
) |
Loss on disposal of assets and impairment charges |
|
|
|
|
|
|
||
Gain from sale-leaseback |
|
|
( |
) |
|
|
|
|
Foreign currency (gain) loss |
|
|
( |
) |
|
|
|
|
Gain from issuance of shares as payment of deferred consideration related to business |
|
|
|
|
|
( |
) |
|
Gain from settlement related to business acquisition |
|
|
|
|
|
( |
) |
|
Amortization of deferred financing costs and debt discount |
|
|
|
|
|
|
||
Amortization of deferred income |
|
|
( |
) |
|
|
( |
) |
Accretion of asset retirement obligation |
|
|
|
|
|
|
||
Non-cash rent |
|
|
|
|
|
|
||
Charges to allowance for credit losses |
|
|
|
|
|
|
||
Income from equity investment |
|
|
( |
) |
|
|
( |
) |
Share-based compensation |
|
|
|
|
|
|
||
Fair value adjustment of financial assets and liabilities |
|
|
( |
) |
|
|
( |
) |
Other operating activities, net |
|
|
( |
) |
|
|
|
|
Changes in assets and liabilities: |
|
|
|
|
|
|
||
Increase in trade receivables |
|
|
( |
) |
|
|
( |
) |
Decrease in inventory |
|
|
|
|
|
|
||
(Increase) decrease in other assets |
|
|
( |
) |
|
|
|
|
(Decrease) increase in accounts payable |
|
|
( |
) |
|
|
|
|
Increase (decrease) in other current liabilities |
|
|
|
|
|
( |
) |
|
Decrease in asset retirement obligation |
|
|
( |
) |
|
|
( |
) |
Increase in non-current liabilities |
|
|
|
|
|
|
||
Net cash provided by operating activities |
|
$ |
|
|
$ |
|
||
The accompanying notes are an integral part of these condensed consolidated financial statements.
8
Table of Contents
ARKO Corp.
Condensed Consolidated Statements of Cash Flows (cont’d)
(Unaudited, in thousands)
|
|
For the Six Months |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Cash flows from investing activities: |
|
|
|
|
|
|
||
Purchase of property and equipment |
|
$ |
( |
) |
|
$ |
( |
) |
Proceeds from sale of property and equipment |
|
|
|
|
|
|
||
Business acquisitions, net of cash |
|
|
|
|
|
( |
) |
|
Loans to equity investment, net |
|
|
|
|
|
|
||
Net cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
||
Receipt of long-term debt, net |
|
|
|
|
|
|
||
Repayment of debt |
|
|
( |
) |
|
|
( |
) |
Principal payments on financing leases |
|
|
( |
) |
|
|
( |
) |
Early settlement of deferred consideration related to business acquisition |
|
|
|
|
|
( |
) |
|
Common stock repurchased |
|
|
( |
) |
|
|
( |
) |
Dividends paid on common stock |
|
|
( |
) |
|
|
( |
) |
Dividends paid on redeemable preferred stock |
|
|
( |
) |
|
|
( |
) |
Net cash used in financing activities |
|
|
( |
) |
|
|
( |
) |
Net increase in cash and cash equivalents and restricted cash |
|
|
|
|
|
|
||
Effect of exchange rate on cash and cash equivalents and restricted cash |
|
|
|
|
|
( |
) |
|
Cash and cash equivalents and restricted cash, beginning of period |
|
|
|
|
|
|
||
Cash and cash equivalents and restricted cash, end of period |
|
$ |
|
|
$ |
|
||
Reconciliation of cash and cash equivalents and restricted cash |
|
|
|
|
|
|
||
Cash and cash equivalents, beginning of period |
|
$ |
|
|
$ |
|
||
Restricted cash, beginning of period |
|
|
|
|
|
|
||
Cash and cash equivalents and restricted cash, beginning of period |
|
$ |
|
|
$ |
|
||
Cash and cash equivalents, end of period |
|
$ |
|
|
$ |
|
||
Restricted cash, end of period |
|
|
|
|
|
|
||
Cash and cash equivalents and restricted cash, end of period |
|
$ |
|
|
$ |
|
||
The accompanying notes are an integral part of these condensed consolidated financial statements.
9
Table of Contents
ARKO Corp.
Condensed Consolidated Statements of Cash Flows (cont’d)
(Unaudited, in thousands)
|
|
For the Six Months |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Supplementary cash flow information: |
|
|
|
|
|
|
||
Cash received for interest |
|
$ |
|
|
$ |
|
||
Cash paid for interest |
|
|
|
|
|
|
||
Cash received for taxes |
|
|
|
|
|
|
||
Cash paid for taxes |
|
|
|
|
|
|
||
Supplementary noncash activities: |
|
|
|
|
|
|
||
Prepaid insurance premiums financed through notes payable |
|
$ |
|
|
$ |
|
||
Purchases of equipment in accounts payable and accrued expenses |
|
|
|
|
|
|
||
Purchase of property and equipment under leases |
|
|
|
|
|
|
||
Disposals of leases of property and equipment |
|
|
|
|
|
|
||
Extinguishment of financial liability in a sale-leaseback transaction |
|
|
|
|
|
|
||
Issuance of shares as payment of deferred consideration related to business acquisition |
|
|
|
|
|
|
||
The accompanying notes are an integral part of these condensed consolidated financial statements.
10
Table of Contents
ARKO Corp.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. General
ARKO Corp. (the “Company”) is a Delaware corporation whose common stock, par value $
The Company’s operations are primarily performed by its wholly owned subsidiary, GPM Investments, LLC, a Delaware limited liability company (“GPM”). Formed in 2002, GPM is engaged directly and through fully owned and controlled subsidiaries in retail activity, which includes the operations of a chain of convenience stores, most of which include adjacent gas stations. GPM is also engaged in wholesale activity, which includes the supply of fuel to gas stations operated by third-parties and, in fleet fueling, which includes the operation of proprietary and third-party cardlock locations (unstaffed fueling locations) and issuance of proprietary fuel cards that provide customers access to a nationwide network of fueling sites. As of June 30, 2025, GPM’s activity included the operation of
The Company has four reportable segments: retail, wholesale, fleet fueling, and GPMP. Refer to Note 10 below for further information with respect to the segments.
2. Summary of Significant Accounting Policies
Basis of Presentation
Interim Financial Statements
The accompanying condensed consolidated financial statements (“interim financial statements”) as of June 30, 2025 and for the three and six months ended June 30, 2025 and 2024 are unaudited and have been prepared in accordance with U.S. GAAP for interim financial information and Regulation S-X set forth by the Securities and Exchange Commission (the “SEC”) for interim reporting. In the opinion of management, all adjustments (consisting of normal and recurring adjustments except those otherwise described herein) considered necessary for a fair presentation have been included in the accompanying interim financial statements. However, they do not include all of the information and disclosures required by U.S. GAAP for complete financial statements. Therefore, the interim financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes of the Company included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (the “annual financial statements”).
The same significant accounting policies, presentation and methods of computation have been followed in these interim financial statements as were applied in the preparation of the annual financial statements.
Accounting Periods
The Company’s fiscal periods end on the last day of the month, and its fiscal year ends on December 31. This results in the Company experiencing fluctuations in current assets and current liabilities due to purchasing and payment patterns which change based upon the day of the week. As a result, working capital can change from period to period not only due to changing business operations, but also due to a change in the day of the week on which a period ends. The Company earns a disproportionate amount of its annual operating income in the second and third quarters as a result of the generally favorable climate and seasonal buying patterns of its customers.
Use of Estimates
In the preparation of interim financial statements, management may make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant
11
Table of Contents
estimates include right-of-use assets and lease liabilities; impairment of goodwill, intangible, right-of-use and fixed assets; environmental assets and liabilities; deferred tax assets; and asset retirement obligations.
Revenue Recognition
Revenue is recognized when control of the promised goods or services is transferred to the customers. This requires the Company to identify contractual performance obligations and determine whether revenue should be recognized at a single point in time or over time, based on when control of goods and services transfers to a customer. Control is transferred to the customer over time if the customer simultaneously receives and consumes the benefits provided by the Company’s performance. If a performance obligation is not satisfied over time, the Company satisfies the performance obligation at a single point in time.
Revenue is recognized in an amount that reflects the consideration to which the Company expects to be entitled in exchange for goods or services.
When the Company satisfies a performance obligation by transferring control of goods or services to the customer, revenue is recognized against contract assets in the amount of consideration to which the Company is entitled. When the consideration amount received from the customer exceeds the amounts recognized as revenue, the Company recognizes a contract liability for the excess.
An asset is recognized related to the costs incurred to obtain a contract (e.g. sales commissions) if the costs are specifically identifiable to a contract, the costs will result in enhancing resources that will be used in satisfying performance obligations in the future and the costs are expected to be recovered. These capitalized costs were approximately $
The Company recognizes a contract asset when making upfront incentive payments to dealers. Certain of the upfront consideration represents a prepaid incentive, as these payments are not made for distinct services provided by the dealer. Others represent payments of equipment installed at a dealer location. The prepaid incentives were approximately $
The Company evaluates if it is a principal or an agent in a transaction to determine whether revenue should be recorded on a gross or a net basis. In performing this analysis, the Company considers first whether it controls the goods before they are transferred to the customers and if it has the ability to direct the use of the goods or obtain benefits from them. The Company also considers the following indicators: (1) the primary obligor, (2) the latitude in establishing prices and selecting suppliers, and (3) the inventory risk borne by the Company before and after the goods have been transferred to the customer. When the Company acts as principal, revenue is recorded on a gross basis. When the Company acts as agent, revenue is recorded on a net basis.
Certain fuel and sales taxes are invoiced by fuel suppliers or collected from customers and remitted to governmental agencies either directly, or through suppliers, by the Company. Whether these taxes are presented on a gross or net basis is dependent on whether the Company is acting as a principal or agent in the sales transaction. Fuel excise taxes are presented on a gross basis for fuel sales because the Company acts as the primary obligor, has pricing latitude, and is exposed to inventory and credit risks.
Refer to Note 10 for disclosure of the revenue disaggregated by segment and product line, as well as a description of the reportable segment operations.
Recent Accounting Pronouncements
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the 2017 U.S. Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The Company is currently assessing the OBBBA’s impact on its consolidated financial statements.
12
Table of Contents
3. Debt
The components of debt were as follows:
|
|
June 30, |
|
|
December 31, |
|
||
|
|
(in thousands) |
|
|||||
Senior Notes |
|
$ |
|
|
$ |
|
||
M&T debt |
|
|
|
|
|
|
||
Capital One Line of Credit |
|
|
|
|
|
|
||
Insurance premium notes |
|
|
|
|
|
|
||
Total debt, net |
|
$ |
|
|
$ |
|
||
Less current portion |
|
|
( |
) |
|
|
( |
) |
Total long-term debt, net |
|
$ |
|
|
$ |
|
||
M&T Bank Credit Agreement
In connection with the M&T Credit Agreement Amendment, the AG真人官方 Estate Loans outstanding as of the date of such amendment began to accrue interest at plus
4. Leases
As of June 30, 2025,
The components of lease cost recorded on the condensed consolidated statements of operations were as follows:
|
|
For the Three Months |
|
|
For the Six Months |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
|
|
(in thousands) |
|
|||||||||||||
Finance lease cost: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation of right-of-use assets |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Interest on lease liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating lease costs included in site operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating lease costs included in general and administrative |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Lease cost related to variable lease payments, short-term |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Right-of-use asset impairment charges and loss (gain) on |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Total lease costs |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
13
Table of Contents
In connection with the closing of the Company’s 2021 acquisition of
In connection with the 2024 acquisition of the
Supplemental balance sheet data related to leases was as follows:
|
|
June 30, |
|
|
December 31, |
|
||
|
|
(in thousands) |
|
|||||
Operating leases |
|
|
|
|
|
|
||
Assets |
|
|
|
|
|
|
||
Right-of-use assets under operating leases |
|
$ |
|
|
$ |
|
||
Liabilities |
|
|
|
|
|
|
||
Operating leases, current portion |
|
|
|
|
|
|
||
Operating leases |
|
|
|
|
|
|
||
Total operating leases |
|
|
|
|
|
|
||
Weighted average remaining lease term (in years) |
|
|
|
|
|
|
||
Weighted average discount rate |
|
|
% |
|
|
% |
||
Financing leases |
|
|
|
|
|
|
||
Assets |
|
|
|
|
|
|
||
Right-of-use assets |
|
$ |
|
|
$ |
|
||
Accumulated amortization |
|
|
( |
) |
|
|
( |
) |
Right-of-use assets under financing leases, net |
|
|
|
|
|
|
||
Liabilities |
|
|
|
|
|
|
||
Financing leases, current portion |
|
|
|
|
|
|
||
Financing leases |
|
|
|
|
|
|
||
Total financing leases |
|
|
|
|
|
|
||
Weighted average remaining lease term (in years) |
|
|
|
|
|
|
||
Weighted average discount rate |
|
|
% |
|
|
% |
||
As of June 30, 2025, future minimum payments for operating lease obligations and financing lease obligations were as set forth in the following table.
14
Table of Contents
|
|
Operating |
|
|
Financing |
|
||
|
|
(in thousands) |
|
|||||
July 2025 through June 2026 |
|
$ |
|
|
$ |
|
||
July 2026 through June 2027 |
|
|
|
|
|
|
||
July 2027 through June 2028 |
|
|
|
|
|
|
||
July 2028 through June 2029 |
|
|
|
|
|
|
||
July 2029 through June 2030 |
|
|
|
|
|
|
||
Thereafter |
|
|
|
|
|
|
||
Gross lease payments |
|
$ |
|
|
$ |
|
||
Less: imputed interest |
|
|
( |
) |
|
|
( |
) |
Total lease liabilities |
|
$ |
|
|
$ |
|
||
5. Financial Derivative Instruments
The Company makes limited use of derivative instruments (futures contracts) to manage certain risks related to diesel fuel prices. The Company does not hold any derivatives for speculative purposes, and it does not use derivatives with leveraged or complex features. The Company currently uses derivative instruments that are traded primarily over national exchanges, such as the New York Mercantile Exchange (“NYMEX”). For accounting purposes, the Company has designated its derivative contracts as fair value hedges of firm commitments.
As of June 30, 2025 and December 31, 2024, the Company had fuel futures contracts to hedge approximately
As of June 30, 2025 and December 31, 2024, there was $
6. Equity
Dividends
The Company’s board of directors (the “Board”) declared, and the Company paid, dividends of $
Share Repurchase Plan
In February 2022, the Board authorized a share repurchase program, which it subsequently increased in May 2023 and May 2024, to provide for the repurchase up to an aggregate of $
7. Share-Based Compensation
The Compensation Committee of the Board (the “Compensation Committee”) has approved the grant of non-qualified stock options, restricted stock units (“RSUs”), and shares of common stock to certain employees, non-employees and members of the Board under the ARKO Corp. 2020 Incentive Compensation Plan (as amended, the “Plan”). Stock options granted under the Plan expire no later than ten years from the date of grant and the exercise price may not be less than the fair market value of the underlying shares on
15
Table of Contents
the date of grant. Vesting periods are assigned to stock options and RSUs on a grant-by-grant basis at the discretion of the Board. The Company issues new shares of common stock upon exercise of stock options and vesting of RSUs.
Additionally, a non-employee director may receive RSUs in lieu of up to
Stock Options
During the six months ended June 30, 2025,
As of June 30, 2025, total unrecognized compensation cost related to unvested stock options was approximately $
Restricted Stock Units and Performance-based Restricted Stock Units
The following table summarizes share activity related to RSUs and performance-based RSUs (“PSUs”):
|
|
RSUs and PSUs |
|
|
Weighted Average Grant Date Fair Value per Share |
|
||
|
|
(in thousands) |
|
|
|
|
||
Nonvested RSUs and PSUs, December 31, 2024 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
|
|
||
Released |
|
|
( |
) |
|
|
|
|
Forfeited |
|
|
( |
) |
|
|
|
|
Performance-based share adjustment |
|
|
( |
) |
|
|
|
|
Nonvested RSUs and PSUs, June 30, 2025 |
|
|
|
|
$ |
|
||
During the six months ended June 30, 2025,
During the six months ended June 30, 2025, the Company granted
For certain of the RSUs and PSUs granted in the six months ended June 30, 2025, the Company has agreed to issue a capped number of incremental shares to the recipients if the Company’s stock price on the vesting dates of such awards is below a certain threshold price (written put options components). These awards were classified as equity instruments and valued based on the fair market value of the underlying stock together with the net fair value of the written put options on the grant date.
Management assesses the probability of achieving the performance criteria on a quarterly basis, and the Compensation Committee determines whether the performance criteria were satisfied, and certifies the award’s vesting percentage, if any, during the fiscal quarter following the end of the applicable performance period. In the first quarter of 2025, the Compensation Committee determined that the performance criteria for the performance period ended December 31, 2024 had been met and certified that the percentage of PSUs that vested with respect to the target amount for the PSUs granted in 2022 was
The fair value of RSUs and PSUs released during the six months ended June 30, 2025 was approximately $
As of June 30, 2025, total unrecognized compensation cost related to RSUs and PSUs was approximately $
16
Table of Contents
Share-Based Compensation Cost
8. Earnings per Share
The following table sets forth the computation of basic and diluted net income per share of common stock:
|
|
For the Three Months |
|
|
For the Six Months |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
|
|
(in thousands) |
|
|||||||||||||
Net income attributable to common stockholders |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average common shares outstanding — Basic |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Effect of dilutive securities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
RSUs and PSUs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average common shares outstanding — Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income per share attributable to common stockholders — |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Net income per share attributable to common stockholders — |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The following potential shares of common stock have been excluded from the computation of diluted net income per share because their effect would have been antidilutive:
|
|
As of June 30, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
|
|
(in thousands) |
|
|||||
Stock options |
|
|
|
|
|
|
||
Ares warrants |
|
|
|
|
|
|
||
Public and Private warrants |
|
|
|
|
|
|
||
Series A redeemable preferred stock |
|
|
|
|
|
|
||
9. Fair Value Measurements and Financial Instruments
The fair value of cash and cash equivalents, restricted cash, short-term investments, trade receivables, accounts payable and other current liabilities approximated their carrying values as of June 30, 2025 and December 31, 2024 primarily due to the short-term maturity of these instruments. On October 21, 2021, the Company completed a private offering of $
The contingent consideration from the acquisition of the business of Empire Petroleum Partners, LLC in 2020 is measured at fair value at the end of each reporting period and amounted to $
17
Table of Contents
(expense) income were recorded as components of other expenses, net on the condensed consolidated statements of operations for the three and six months ended June 30, 2025 and 2024, respectively.
The public warrants to purchase the Company’s common stock (the “Public Warrants”), of which approximately
The private warrants to purchase the Company’s common stock (the “Private Warrants”), of which approximately
|
|
June 30, |
|
|
Expected term (in years) |
|
|
|
|
Expected dividend rate |
|
|
% |
|
Volatility |
|
|
% |
|
Risk-free interest rate |
|
|
% |
|
Strike price |
|
$ |
|
|
For the change in the fair value of the Private Warrants, approximately $
The founders of Haymaker (as defined in Note 10 to the annual financial statements) will be entitled to up to
|
|
June 30, |
|
|
Expected term (in years) |
|
|
|
|
Volatility |
|
|
% |
|
Risk-free interest rate |
|
|
% |
|
Stock price |
|
$ |
|
|
For the change in the fair value of the Additional Deferred Shares, approximately $(
10. Segment Reporting
The reportable segments were determined based on information reviewed by the Company’s chief operating decision maker (“CODM”) for operational decision-making purposes, and the segment information is prepared on the same basis on which the CODM reviews such financial information. The Company’s reportable segments are retail, wholesale, fleet fueling and GPMP. The CODM utilizes operating income from each segment to assess its operating performance and to make decisions about allocating resources to each segment. Arie Kotler, the Company’s is the CODM.
The accounting policies of the segments are the same as those described in the summary of significant accounting policies except that rent expenses for each segment are recognized and measured on the basis of cash payments.
18
Table of Contents
The retail segment includes the operation of a chain of retail stores, which includes convenience stores selling fuel products and other merchandise to retail customers. At its retail convenience stores, the Company owns the merchandise and fuel inventory and employs personnel to manage the store.
The wholesale segment supplies fuel to dealers, sub-wholesalers and bulk and spot purchasers, on either a cost plus or consignment basis. For consignment arrangements, the Company retains ownership of the fuel inventory at the site, is responsible for the pricing of the fuel to the end consumer and shares the gross profit earned from the sale of fuel with the consignment dealers. For cost plus arrangements, the Company sells fuel to dealers and bulk and spot purchasers on a fixed-fee basis. The sales price is determined according to the terms of the relevant agreement, which typically reflects the Company’s total fuel costs plus the cost of transportation and a margin, with the Company generally retaining any prompt pay discounts and rebates.
The fleet fueling segment includes the operation of proprietary and third-party cardlock locations (unstaffed fueling locations), and commissions from the sales of fuel using proprietary fuel cards that provide customers access to a nationwide network of fueling sites.
The GPMP segment includes GPMP and primarily includes its inter-segment sale and supply of fuel to substantially all of GPM’s sites that sell fuel in the retail and wholesale segments, at GPMP’s cost of fuel (including taxes and transportation) plus a fixed margin (currently
The “All Other” segment includes the results of non-reportable segments which do not meet both quantitative and qualitative criteria as defined under ASC 280, Segment Reporting.
The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM. Intersegment expenses are included within the amounts shown; however, the fuel costs in the retail, wholesale and fleet segments exclude the estimated fixed margin or fixed fee paid to GPMP for the cost of fuel.
The majority of general and administrative expenses, depreciation and amortization, net other expenses, net interest and other financial expenses, income taxes and minor other income items including intercompany operating leases are not allocated to the segments. Other segment expenses include utilities, telephone, upkeep and taxes, insurance, supplies, advertising, and certain other expenses. Other segment expenses in the GPMP segment also include general and administrative expenses, depreciation and amortization, and other income, net.
With the exception of goodwill, assets and liabilities relevant to the reportable segments are generally not assigned to any particular segment, but rather, managed and reviewed by the CODM at the consolidated level. All reportable segment revenues were generated from sites within the U.S. and substantially all of the Company’s assets were within the U.S.
Inter-segment transactions primarily included the distribution of fuel by GPMP to substantially all of GPM’s sites that sell fuel (both in the retail and wholesale segments) and charges by GPMP primarily to sites that sell fuel in the fleet fueling segment which are not supplied by GPMP. The effect of these inter-segment transactions was eliminated in the interim financial statements.
19
Table of Contents
|
|
Retail |
|
|
Wholesale |
|
|
Fleet Fueling |
|
|
GPMP |
|
|
All Other |
|
|
Total |
|
||||||
For the Three Months Ended June 30, 2025 |
(in thousands) |
|
||||||||||||||||||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Fuel revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Merchandise revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Other revenues, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total revenues from external |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Inter-segment revenues |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Fuel costs |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|
|
|
|
|
||||||
Merchandise costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Salaries and wages |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Credit card fees |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Rent |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Repairs and maintenance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Other segment expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Operating income (loss) from |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||||
Interest and other financial expenses, net |
|
|
|
|
|
|
|
|
$ |
( |
) |
|
|
|
|
$ |
( |
) |
||||||
Income from equity investment |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
$ |
|
||||||
|
|
Retail |
|
|
Wholesale |
|
|
Fleet Fueling |
|
|
GPMP |
|
|
All Other |
|
|
Total |
|
||||||
For the Three Months Ended June 30, 2024 |
(in thousands) |
|
||||||||||||||||||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Fuel revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Merchandise revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Other revenues, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total revenues from external |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Inter-segment revenues |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Fuel costs |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|
|
|
|
|
||||||
Merchandise costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Salaries and wages |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Credit card fees |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Rent |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Repairs and maintenance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Other segment expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Operating income (loss) from |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||||
Interest and other financial expenses, net |
|
|
|
|
|
|
|
|
$ |
( |
) |
|
|
|
|
$ |
( |
) |
||||||
Income from equity investment |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
$ |
|
||||||
20
Table of Contents
|
|
Retail |
|
|
Wholesale |
|
|
Fleet Fueling |
|
|
GPMP |
|
|
All Other |
|
|
Total |
|
||||||
For the Six Months Ended June 30, 2025 |
(in thousands) |
|
||||||||||||||||||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Fuel revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Merchandise revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Other revenues, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total revenues from external |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Inter-segment revenues |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Fuel costs |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|
|
|
|
|
||||||
Merchandise costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Salaries and wages |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Credit card fees |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Rent |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Repairs and maintenance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Other segment expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Operating income from segments |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Interest and other financial expenses, net |
|
|
|
|
|
|
|
|
$ |
( |
) |
|
|
|
|
$ |
( |
) |
||||||
Income from equity investment |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
$ |
|
||||||
|
|
Retail |
|
|
Wholesale |
|
|
Fleet Fueling |
|
|
GPMP |
|
|
All Other |
|
|
Total |
|
||||||
For the Six Months Ended June 30, 2024 |
(in thousands) |
|
||||||||||||||||||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Fuel revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Merchandise revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Other revenues, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total revenues from external |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Inter-segment revenues |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Fuel costs |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|
|
|
|
|
||||||
Merchandise costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Salaries and wages |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Credit card fees |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Rent |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Repairs and maintenance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Other segment expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Operating income (loss) from |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||||
Interest and other financial expenses, net |
|
|
|
|
|
|
|
|
$ |
( |
) |
|
|
|
|
$ |
( |
) |
||||||
Income from equity investment |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
$ |
|
||||||
A reconciliation of operating income from reportable segments to consolidated income before income taxes on the condensed consolidated statements of operations was as follows:
21
Table of Contents
|
|
For the Three Months |
|
|
For the Six Months |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
|
|
(in thousands) |
|
|||||||||||||
Operating income from reportable segments |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
All other operating (loss) income |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Intercompany charges by GPMP 1 |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Interest and other financial expenses, net |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Amounts not allocated to segments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Site operating expenses |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
General and administrative expenses |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Depreciation and amortization |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Other income (expenses), net |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Interest and other financial expenses, net |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Income before income taxes |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
1 Represents the estimated fixed margin or fixed fee (currently
11. Commitments and Contingencies
Environmental Liabilities and Contingencies
The Company is subject to certain federal and state environmental laws and regulations associated with sites at which it stores and sells fuel and other fuel products, as well as at owned and leased locations leased or subleased to dealers. As of June 30, 2025 and December 31, 2024, environmental obligations totaled $
The Company maintains certain environmental insurance policies and participates in various state underground storage tank funds that entitle it to be reimbursed for remediation costs. Estimated amounts that will be recovered from its insurance policies and various state funds for the exposures totaled $
Asset Retirement Obligation
As part of the fuel operations at its retail convenience stores and proprietary cardlock locations, at most of the owned and leased locations leased to dealers, at certain other dealer locations where the Company owns tanks or otherwise agreed to be contractually liable for tank maintenance, and at third-party cardlock locations, there are aboveground and underground storage tanks for which the Company is responsible. The future cost to remove a storage tank is recognized over the estimated remaining useful life of the storage tank, or if sooner, the termination of the applicable lease. A liability for the fair value of an asset retirement obligation with a corresponding increase to the carrying value of the related long-lived asset is recorded at the time a storage tank is installed. The estimated liability is based upon historical experience in removing storage tanks, estimated tank useful lives, external estimates as to the cost to remove the tanks in the future and current and anticipated federal and state regulatory requirements governing the removal of tanks, and discounted. The Company has recorded an asset retirement obligation of $
Program Agreement
Under and subject to the terms of the Program Agreement with Blue Owl (both as defined in Note 8 to the annual financial statements), Blue Owl had agreed, from May 2, 2023 through September 30, 2025, to purchase up to $
22
Table of Contents
Wage and Hour Collective Action Settlement
In March 2025, at mediation, the Company and a law firm representing store managers in multiple states entered into a term sheet, pursuant to which the Company, without admitting any liability, agreed to settle allegations claiming that the Company violated the Fair Labor Standards Act and state laws by classifying certain store managers as exempt from overtime.
Following mediation, the parties negotiated and executed a settlement agreement, which was filed in court along with a compliant requesting collective action treatment. In June 2025, the court approved the proposed settlement agreement and treating the case as a collective action. The amount payable by the Company will depend on how many of the store managers opt into the collective action. In the first quarter of 2025, approximately $
Other Legal Matters
The Company is a party to various legal actions, as both plaintiff and defendant, in the ordinary course of business. The Company’s management believes, based on estimations with support from legal counsel for these matters, that these legal actions are routine in nature and incidental to the operation of the Company’s business and that it is not reasonably probable that the ultimate resolution of these matters will have a material adverse impact on the Company’s business, financial condition, results of operations and cash flows.
12. Related Party Transactions
There have been no material changes to the description of related party transactions as set forth in the annual financial statements.
23
Table of Contents
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
You should read this discussion together with the unaudited Condensed Consolidated Financial Statements, related notes, and other financial information included elsewhere in this Quarterly Report on Form 10-Q together with our audited consolidated financial statements, related notes, and other information contained in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “Form 10-K”). The following discussion contains assumptions, estimates and other forward-looking statements that involve a number of risks and uncertainties, including those discussed under “Risk Factors,” in Part I, Item 1A of the Form 10-K and in Part II, Item 1A of this Quarterly Report on Form 10-Q and as described from time to time in our other filings with the Securities and Exchange Commission. These risks could cause our actual results to differ materially from those anticipated in these forward-looking statements.
Overview
ARKO Corp. was incorporated under the laws of Delaware on August 26, 2020. Our shares of common stock, $0.0001 par value per share (“common stock”), and publicly-traded warrants are listed on the Nasdaq Stock Market (“Nasdaq”) under the symbols “ARKO” and “ARKOW,” respectively. Our wholly owned subsidiary, GPM Investments, LLC, a Delaware limited liability company that was formed on June 12, 2002, which we refer to as GPM, is our primary operating entity.
Based in Richmond, VA, we are a leading independent convenience store operator and, as of June 30, 2025, we were one of the largest convenience store chains in the United States (“U.S.”) ranked by store count, operating 1,254 retail convenience stores. As of June 30, 2025, we also supplied fuel to 2,014 dealers locations and operated 287 cardlock locations (unstaffed fueling locations). We are well diversified geographically and, as of June 30, 2025, operated in the District of Columbia and more than 30 states in the Mid-Atlantic, Midwestern, Northeastern, Southeastern and Southwestern U.S.
Our retail segment includes the operation of a chain of retail stores, which includes convenience stores selling fuel products and merchandise to retail customers, from which we generate a significant portion of our revenue and a large proportion of our profitability. As of June 30, 2025, we operated the stores under more than 25 regional store brands including 1-Stop, Admiral, Apple Market®, BreadBox, Corner Mart, Dixie Mart, ExpressStop, E-Z Mart®, fas mart®, fastmarket®, Flash Market, Handy Mart, Jetz, Jiffi Stop®, Jiffy Stop, Li’l Cricket, Market Express, Next Door Store®, Pride, Roadrunner Markets, Rose Mart, Rstore, Scotchman®, shore stop®, Speedy’s, SpeedyQ, Town Star, Uncle’s, Village Pantry® and Young’s. We focus our marketing and merchandising initiatives at our retail stores on offering our customers an assortment of products with an attractive value proposition. Our retail offering includes a wide array of cold and hot foodservice, beverages, cigarettes and other tobacco products, candy, salty snacks, grocery, beer and general merchandise. We have foodservice offerings at approximately 1,070 stores, which include hot and fresh grab-n-go foods, deli, fried chicken, bakery, pizza, roller grill items and other prepared foods. We supplement our foodservice offering with approximately 100 quick service major national brand restaurants. Relevant and delicious food offerings are a key strategic priority for us with the launch of the flagship location of our new format store program in June 2025. Additionally, we provide a number of traditional convenience store services, including lottery, prepaid products, gift cards, money orders, ATMs, gaming, and other ancillary product and service offerings. We also generate revenues from car washes at approximately 70 of our locations.
We had approximately 2.35 million enrolled members in our fas REWARDS® loyalty program at the end of the second quarter of 2025, representing an increase of 9.8% from the end of the second quarter of 2024. Our fas REWARDS® loyalty program is available in all of our retail stores and offers enrolled loyalty members in store exclusive promotional pricing, in-app member only deals not available without the app, as well as the ability to earn points that can be redeemed for either fuel or merchandise savings. Other in-app features include order and delivery, age verified offers on tobacco and alcohol, and a store locator with current gas prices at GPM stores nearby.
Starting in the middle of 2024, we have expanded our wholesale fuel distribution network by converting a meaningful number of retail locations to dealer sites, which we expect will yield greater profitability. These sites, coupled with the sale of fuel at cardlock locations and commissions earned from the sales of fuel using proprietary fuel cards that provide customers access to a nationwide network of fueling sites, provide stable, ratable cash flows that, together with free cash flow from our retail segment, can be deployed to pursue accretive acquisitions and invest in our business. The wholesale segment adds significant fuel volumes to our robust retail fuel sales, which we believe enhances our purchasing power for our entire platform, including our retail segment, and improves our competitiveness as an acquirer of choice.
24
Table of Contents
Description of Segments
Retail Segment
Our retail segment includes the operation of a chain of retail stores, which includes convenience stores selling fuel products and merchandise to retail customers. At our convenience stores, we own the merchandise and fuel inventory and employ personnel to manage the store.
Wholesale Segment
Our wholesale segment supplies fuel to dealers, sub-wholesalers, and bulk and spot purchasers, on either a consignment or cost plus basis. For consignment arrangements, we retain ownership of the fuel inventory at the site, are responsible for the pricing of the fuel to the end consumer and share a portion of the gross profit earned from the sale of fuel with the consignment dealers. For cost plus arrangements, we sell fuel to dealers and bulk and spot purchasers on a fixed-fee basis. The sales price is determined according to the terms of the relevant agreement, which typically reflects our total fuel costs plus the cost of transportation and a margin, with us generally retaining the prompt pay discounts and rebates.
Fleet Fueling Segment
Our fleet fueling segment includes the operation of proprietary and third-party cardlock locations (unstaffed fueling locations), and commissions from the sales of fuel using proprietary fuel cards that provide customers access to a nationwide network of fueling sites.
GPMP Segment
Our GPMP segment primarily engages in inter-segment transactions of wholesale distribution of fuel to substantially all of our sites that sell fuel in the retail and wholesale segments. GPM Petroleum LP (“GPMP”) sells and supplies fuel at GPMP’s cost of fuel (including taxes and transportation) plus a fixed margin to such supplied sites and charges an inter-segment fixed fee primarily to sites in the fleet fueling segment which are not supplied by GPMP. The effect of these inter-segment transactions was eliminated in the consolidated financial statements.
Multi-Year Transformation Plan
We continue to develop and implement our Transformation Plan, which includes the following elements, among others:
As we proceed with this Transformation Plan, we may incur associated non-recurring expenses, including personnel costs, divestiture costs, professional services fees, and losses on disposal of assets and impairment charges.
25
Table of Contents
The following tables provide a history of our acquisitions, site conversions and site closings, including as part of our Transformation Plan, for the periods noted, for the retail, wholesale and fleet fueling segments:
|
|
For the Three Months |
|
|
For the Six Months |
|
||||||||||
Retail Segment |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Number of sites at beginning of period |
|
|
1,329 |
|
|
|
1,540 |
|
|
|
1,389 |
|
|
|
1,543 |
|
Acquired sites |
|
|
— |
|
|
|
21 |
|
|
|
— |
|
|
|
21 |
|
Newly opened or reopened sites |
|
|
— |
|
|
|
— |
|
|
|
2 |
|
|
|
1 |
|
Company-controlled sites converted to consignment |
|
|
(70 |
) |
|
|
(2 |
) |
|
|
(129 |
) |
|
|
(2 |
) |
Sites closed, divested or converted to rentals |
|
|
(5 |
) |
|
|
(11 |
) |
|
|
(8 |
) |
|
|
(15 |
) |
Number of sites at end of period |
|
|
1,254 |
|
|
|
1,548 |
|
|
|
1,254 |
|
|
|
1,548 |
|
|
|
For the Three Months |
|
|
For the Six Months |
|
||||||||||
Wholesale Segment 1 |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Number of sites at beginning of period |
|
|
1,961 |
|
|
|
1,816 |
|
|
|
1,922 |
|
|
|
1,825 |
|
Newly opened or reopened sites 2 |
|
|
4 |
|
|
|
11 |
|
|
|
10 |
|
|
|
20 |
|
Consignment or fuel supply locations converted |
|
|
70 |
|
|
|
2 |
|
|
|
129 |
|
|
|
2 |
|
Closed or divested sites |
|
|
(21 |
) |
|
|
(35 |
) |
|
|
(47 |
) |
|
|
(53 |
) |
Number of sites at end of period |
|
|
2,014 |
|
|
|
1,794 |
|
|
|
2,014 |
|
|
|
1,794 |
|
1 Excludes bulk and spot purchasers.
2 Includes all signed fuel supply agreements irrespective of fuel distribution commencement date.
|
|
For the Three Months |
|
|
For the Six Months |
|
||||||||||
Fleet Fueling Segment |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Number of sites at beginning of period |
|
|
280 |
|
|
|
296 |
|
|
|
280 |
|
|
|
298 |
|
Newly opened or reopened sites |
|
|
8 |
|
|
|
— |
|
|
|
9 |
|
|
|
— |
|
Closed or divested sites |
|
|
(1 |
) |
|
|
(2 |
) |
|
|
(2 |
) |
|
|
(4 |
) |
Number of sites at end of period |
|
|
287 |
|
|
|
294 |
|
|
|
287 |
|
|
|
294 |
|
Trends Impacting Our Business
We achieved strong store growth over the last decade, driven primarily by a highly successful acquisition strategy, inclusive of 26 completed acquisitions from 2013 through June 30, 2025. Most recently, on April 9, 2024, we completed our acquisition of 21 SpeedyQ Markets convenience stores located in Michigan (the “SpeedyQ Acquisition”). Our strategic acquisitions, as well as the conversion of a meaningful number of retail locations to dealer sites, have had, and may continue to have, a significant impact on our reported results, which can make period to period comparisons difficult.
In the first quarter of 2025, we opened a Dunkin’ store and a fastmarket® location. Additionally, one NTI (new to industry) store opened in July 2025 and we have began working on three more NTI stores, out of which two are targeted to open in the second half of 2025.
Our results of operation are significantly impacted by the retail fuel margins we earn on gallons sold. These fuel margins can change rapidly because they are influenced by many factors, including: the wholesale cost of fuel; interruptions in supply caused by severe weather; supply chain disruptions; refinery mechanical failures; and competition in the local markets in which we operate.
The cost of our main products, gasoline and diesel fuel, is greatly impacted by the wholesale cost of fuel in the United States. We attempt to pass wholesale fuel cost changes to our customers through retail price changes; however, we are not always able to do so. Competitive conditions primarily drive the timing of any increases or decreases in retail prices. We tend to realize lower fuel margins when the cost of fuel is increasing gradually over a longer period and higher fuel margins when the cost of fuel is declining or more volatile over a shorter period of time. Because market and geopolitical conditions constrain, from time to time, the supply of fuel, including diesel fuel in particular, we maintain terminal storage of diesel fuel for short-term supply needs for our fleet fueling sites.
26
Table of Contents
Additionally, the significant increase in the rate of inflation in the U.S. in recent years and the effect of higher prevailing interest rates have increased merchandise cost and reduced consumer purchasing power. We have mitigated the impact of a portion of these higher costs on operating results with retail price increases. The persistence of, or increase in, inflation or high interest rates could negatively impact the demand for our products and services, including due to consumers reducing travel, which could reduce sales volumes. Because of recent and current labor market conditions and the prevailing wage rates in the markets in which we operate, we have increased wages, which has increased, and may continue to increase, our costs associated with recruiting and retaining qualified personnel. Additionally, any major changes in tax or trade policy between the U.S. and countries from which we or our suppliers source merchandise and other products for our sites, such as the imposition of additional tariffs or duties on imported products, could require that we take certain actions, including raising prices on products we sell and seeking alternative sources of supply. Further, any major changes could lead to significant cost increases and delays in opening remodeled or new convenience stores or other improvements to our sites.
We also operate in a highly competitive retail convenience market that includes businesses with operations and services that are similar to those that we provide. We believe that convenience stores managed by individual operators that offer branded or non-branded fuel are also significant competitors in the local markets in which we operate. Often, operators of both chains and individual stores compete by selling unbranded fuel at lower retail prices relative to the market. The convenience store industry is also experiencing competition from other retail sectors including grocery stores, large warehouse retail stores, dollar stores and pharmacies.
Legislative Update
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the 2017 U.S. Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We are currently assessing the OBBBA’s impact on our consolidated financial statements.
Seasonality
Our business is seasonal, and our operating income in the second and third quarters has historically been significantly greater than in the first and fourth quarters as a result of the generally favorable climate and seasonal buying patterns of our customers.
Results of Operations for the three and six months ended June 30, 2025 and 2024
The period-to-period comparisons of our results of operations contained in this Management’s Discussion and Analysis of Financial Condition and Results of Operation have been prepared using our condensed consolidated interim financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q (the “Quarterly Financial Statements”). The following discussion should be read in conjunction with the Quarterly Financial Statements. All figures for fuel costs, fuel contribution and fuel margin per gallon exclude the estimated fixed margin or fixed fee paid to GPMP for the cost of fuel (intercompany charges by GPMP).
Consolidated Results
The table below shows our consolidated results for the three and six months ended June 30, 2025 and 2024, together with certain key metrics.
27
Table of Contents
|
|
For the Three Months |
|
|
For the Six Months |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Revenues: |
|
(in thousands) |
|
|||||||||||||
Fuel revenue |
|
$ |
1,569,542 |
|
|
$ |
1,887,531 |
|
|
$ |
3,016,458 |
|
|
$ |
3,518,863 |
|
Merchandise revenue |
|
|
400,126 |
|
|
|
474,248 |
|
|
|
754,611 |
|
|
|
888,903 |
|
Other revenues, net |
|
|
29,851 |
|
|
|
26,384 |
|
|
|
57,355 |
|
|
|
52,851 |
|
Total revenues |
|
|
1,999,519 |
|
|
|
2,388,163 |
|
|
|
3,828,424 |
|
|
|
4,460,617 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fuel costs |
|
|
1,417,646 |
|
|
|
1,726,761 |
|
|
|
2,742,702 |
|
|
|
3,229,063 |
|
Merchandise costs |
|
|
265,641 |
|
|
|
318,489 |
|
|
|
502,556 |
|
|
|
598,226 |
|
Site operating expenses |
|
|
202,453 |
|
|
|
223,691 |
|
|
|
402,434 |
|
|
|
442,622 |
|
General and administrative expenses |
|
|
40,742 |
|
|
|
42,436 |
|
|
|
82,355 |
|
|
|
84,594 |
|
Depreciation and amortization |
|
|
33,602 |
|
|
|
33,577 |
|
|
|
68,489 |
|
|
|
65,293 |
|
Total operating expenses |
|
|
1,960,084 |
|
|
|
2,344,954 |
|
|
|
3,798,536 |
|
|
|
4,419,798 |
|
Other (income) expenses, net |
|
|
(17,255 |
) |
|
|
261 |
|
|
|
(15,038 |
) |
|
|
2,737 |
|
Operating income |
|
|
56,690 |
|
|
|
42,948 |
|
|
|
44,926 |
|
|
|
38,082 |
|
Interest and other financial expenses, net |
|
|
(19,518 |
) |
|
|
(21,367 |
) |
|
|
(33,369 |
) |
|
|
(23,824 |
) |
Income before income taxes |
|
|
37,172 |
|
|
|
21,581 |
|
|
|
11,557 |
|
|
|
14,258 |
|
Income tax expense |
|
|
(17,100 |
) |
|
|
(7,546 |
) |
|
|
(4,178 |
) |
|
|
(839 |
) |
Income from equity investment |
|
|
26 |
|
|
|
28 |
|
|
|
47 |
|
|
|
50 |
|
Net income attributable to ARKO Corp. |
|
$ |
20,098 |
|
|
$ |
14,063 |
|
|
$ |
7,426 |
|
|
$ |
13,469 |
|
Series A redeemable preferred stock dividends |
|
|
(1,433 |
) |
|
|
(1,445 |
) |
|
|
(2,851 |
) |
|
|
(2,859 |
) |
Net income attributable to common shareholders |
|
$ |
18,665 |
|
|
$ |
12,618 |
|
|
$ |
4,575 |
|
|
$ |
10,610 |
|
Fuel gallons sold |
|
|
531,186 |
|
|
|
567,609 |
|
|
|
1,021,526 |
|
|
|
1,086,922 |
|
Fuel margin, cents per gallon 1 |
|
|
28.6 |
|
|
|
28.3 |
|
|
|
26.8 |
|
|
|
26.7 |
|
Merchandise contribution 2 |
|
$ |
134,485 |
|
|
$ |
155,759 |
|
|
$ |
252,055 |
|
|
$ |
290,677 |
|
Merchandise margin 3 |
|
|
33.6 |
% |
|
|
32.8 |
% |
|
|
33.4 |
% |
|
|
32.7 |
% |
Adjusted EBITDA 4 |
|
$ |
76,938 |
|
|
$ |
80,070 |
|
|
$ |
107,793 |
|
|
$ |
113,235 |
|
Non-cash rent expense 5 |
|
$ |
3,103 |
|
|
$ |
3,687 |
|
|
$ |
6,410 |
|
|
$ |
7,171 |
|
1 Calculated as fuel revenue less fuel costs divided by fuel gallons sold.
2 Calculated as merchandise revenue less merchandise costs.
3 Calculated as merchandise contribution divided by merchandise revenue.
4 Refer to “Use of Non-GAAP Measures” below for discussion of this non-GAAP performance measure and related reconciliation to net income.
5 Non-cash rent expense reflects the extent to which our GAAP rent expense recognized exceeded (or was less than) our cash rent payments. GAAP rent expense varies depending on the terms of our lease portfolio. For newer leases, our rent expense recognized typically exceeds our cash rent payments, whereas, for more mature leases, rent expense recognized is typically less than our cash rent payments.
Three Months Ended June 30, 2025 versus Three Months Ended June 30, 2024
For the three months ended June 30, 2025, fuel revenue decreased by $318.0 million, or 16.8%, compared to the second quarter of 2024. The decrease in fuel revenue was attributable primarily to a decrease in the average price of fuel compared to the second quarter of 2024 and fewer gallons sold in the second quarter of 2025 compared to the second quarter of 2024 due to a challenging macroeconomic environment.
For the three months ended June 30, 2025, merchandise revenue decreased by $74.1 million, or 15.6%, compared to the second quarter of 2024, primarily due to a decrease in merchandise revenue from retail stores that we closed or converted to dealers in the trailing 12 month period and a decrease in same store merchandise revenues.
For the three months ended June 30, 2025, other revenues, net increased by $3.5 million, or 13.1%, compared to the second quarter of 2024, primarily due to the net impact of additional income from retail stores that we converted to dealers in the trailing 12 month period.
For the three months ended June 30, 2025, total operating expenses decreased by $384.9 million compared to the second quarter of 2024. Fuel costs decreased $309.1 million, or 17.9%, compared to the second quarter of 2024, and merchandise costs decreased $52.8 million, or 16.6%, compared to the second quarter of 2024, consistent with the reduction in fuel and merchandise revenues. For the three months ended June 30, 2025, site operating expenses decreased $21.2 million, or 9.5%, compared to the second quarter of
28
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2024 due to a decrease in same store expenses, including lower personnel costs and credit card fees, and lower expenses due to retail stores that we closed or converted to dealers.
For the three months ended June 30, 2025, general and administrative expenses decreased $1.7 million, or 4.0%, compared to the second quarter of 2024.
For the three months ended June 30, 2025 and 2024, depreciation and amortization expenses were similar.
For the three months ended June 30, 2025, other income, net increased by $17.5 million, compared to the second quarter of 2024 primarily due to a gain of approximately $20.8 million related to the expiration of a real estate purchase option received in 2021 in connection with our acquisition of certain ExpressStop convenience stores that was accounted for as a sale-leaseback, which was primarily offset by additional losses on disposal of assets and impairment charges in the second quarter of 2025 compared to the second quarter of 2024.
For the three months ended June 30, 2025, operating income was $56.7 million compared to $42.9 million for the three months ended June 30, 2024. The increase was primarily due to the gain on sale-leaseback, partially offset by lower same store merchandise and fuel contribution.
For the three months ended June 30, 2025, interest and other financial expenses, net decreased by $1.8 million compared to the second quarter of 2024, primarily related to lower average interest rates in the second quarter of 2025 and higher interest income generated.
For the three months ended June 30, 2025, income tax expense was $17.1 million compared to $7.5 million for the three months ended June 30, 2024, with the increase in the effective tax rate primarily attributable to the deferred income tax expense recognized related to the gain on sale-leaseback.
For the three months ended June 30, 2025, net income attributable to the Company was $20.1 million compared to $14.1 million for the three months ended June 30, 2024.
For the three months ended June 30, 2025, Adjusted EBITDA was $76.9 million compared to $80.1 million for the three months ended June 30, 2024. Refer to “Use of Non-GAAP Measures” below for discussion of this non-GAAP performance measure and related reconciliation to net income.
Six Months Ended June 30, 2025 versus Six Months Ended June 30, 2024
For the six months ended June 30, 2025, fuel revenue decreased by $502.4 million, or 14.3%, compared to the first half of 2024. The decrease in fuel revenue was attributable primarily to a decrease in the average price of fuel compared to the first half of 2024 and fewer gallons sold in the first half of 2025 compared to the first half of 2024, due to a challenging macroeconomic environment, as well as severe weather conditions in January and February 2025 in certain of the markets in which we operate.
For the six months ended June 30, 2025, merchandise revenue decreased by $134.3 million, or 15.1%, compared to the first half of 2024, primarily due to a decrease in merchandise revenue from retail stores that we closed or converted to dealers in the trailing 12 month period and a decrease in same store merchandise revenues.
For the six months ended June 30, 2025, other revenue increased by $4.5 million, or 8.5%, compared to the first half of 2024, primarily due to the net impact of additional income from retail stores that we converted to dealers in the trailing 12 month period.
For the six months ended June 30, 2025, total operating expenses decreased by $621.3 million, or 14.1%, compared to the first half of 2024. Fuel costs decreased $486.4 million, or 15.1%, compared to the first half of 2024, and merchandise costs decreased $95.7 million, or 16.0%, compared to the first half of 2024, consistent with the reduction in fuel and merchandise revenues. For the six months ended June 30, 2025, site operating expenses decreased $40.2 million, or 9.1%, compared to the first half of 2024 due to a decrease in same store expenses, including lower personnel costs and credit card fees partially offset by higher snow removal expenses resulting from severe weather conditions in certain of the markets in which we operate, and lower expenses due to retail stores that we closed or converted to dealers, slightly offset by incremental expenses as a result of the SpeedyQ Acquisition.
For the six months ended June 30, 2025, general and administrative expenses decreased $2.2 million, or 2.6%, compared to the first half of 2024.
For the six months ended June 30, 2025, depreciation and amortization expenses increased $3.2 million, or 4.9%, compared to the first half of 2024 primarily due to assets acquired in the trailing 12 month period.
29
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For the six months ended June 30, 2025, other income, net increased by $17.8 million, compared to the first half of 2024, primarily due to a gain of approximately $20.8 million related to the expiration of a real estate purchase option received in 2021 in connection with our acquisition of certain ExpressStop convenience stores that was accounted for as a sale-leaseback, partially offset by greater losses on disposal of assets and impairment charges and higher acquisition and divestiture costs in the first half of 2025 compared to the first half of 2024.
For the six months ended June 30, 2025, operating income was $44.9 million compared to $38.1 million for the six months ended June 30, 2024. The increase was primarily due to the gain on the aforementioned sale-leaseback and the benefit from retail stores that we closed or converted to dealers in the trailing 12 month period, partially offset by lower same store merchandise and fuel contribution and higher depreciation and amortization expenses.
For the six months ended June 30, 2025, interest and other financial expenses, net increased by $9.5 million compared to the first half of 2024, primarily related to a decrease of $4.3 million in income recorded in the first half of 2025 compared to the first half of 2024 for fair value adjustments related to the Public Warrants, Private Warrants and Additional Deferred Shares (each as defined in Note 9 to the Quarterly Financial Statements) and approximately $9.2 million recorded as financial income in the first half of 2024 related to the issuance of the shares as payment of deferred consideration and the settlement of deferred consideration related to the TEG acquisition, partially offset by higher interest income generated and lower average interest rates in the first half of 2025.
For the six months ended June 30, 2025 and 2024, income tax expense was $4.2 million and $0.8 million, respectively.
For the six months ended June 30, 2025 and 2024, net income attributable to the Company was $7.4 million and $13.5 million, respectively.
For the six months ended June 30, 2025, Adjusted EBITDA was $107.8 million compared to $113.2 million for the six months ended June 30, 2024. Refer to “Use of Non-GAAP Measures” below for discussion of this non-GAAP performance measure and related reconciliation to net income.
Segment Results
Disclosure of Incremental Contributions From Acquisitions
In the discussion of our segment results, we disclose certain information with respect to our acquisitions on an “incremental” basis. For example, incremental fuel gallons sold with respect to recent acquisitions. Incremental amounts or gallons related to such acquisitions reflect only the change (i.e. increase) in the contribution of the acquisitions between the referenced periods as they are not reflected yet in same store figures.
Retail Segment
The table below shows the results of the retail segment for the three and six months ended June 30, 2025 and 2024, together with certain key metrics for the segment.
30
Table of Contents
|
|
For the Three Months |
|
|
For the Six Months |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Revenues: |
|
(in thousands) |
|
|||||||||||||
Fuel revenue |
|
$ |
748,103 |
|
|
$ |
976,372 |
|
|
$ |
1,438,789 |
|
|
$ |
1,800,800 |
|
Merchandise revenue |
|
|
400,126 |
|
|
|
474,248 |
|
|
|
754,611 |
|
|
|
888,903 |
|
Other revenues, net |
|
|
14,622 |
|
|
|
16,735 |
|
|
|
29,169 |
|
|
|
33,414 |
|
Total revenues |
|
|
1,162,851 |
|
|
|
1,467,355 |
|
|
|
2,222,569 |
|
|
|
2,723,117 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fuel costs 1 |
|
|
640,231 |
|
|
|
858,391 |
|
|
|
1,245,644 |
|
|
|
1,589,886 |
|
Merchandise costs |
|
|
265,641 |
|
|
|
318,489 |
|
|
|
502,556 |
|
|
|
598,226 |
|
Site operating expenses |
|
|
176,609 |
|
|
|
202,550 |
|
|
|
353,848 |
|
|
|
400,567 |
|
Total operating expenses |
|
|
1,082,481 |
|
|
|
1,379,430 |
|
|
|
2,102,048 |
|
|
|
2,588,679 |
|
Operating income |
|
$ |
80,370 |
|
|
$ |
87,925 |
|
|
$ |
120,521 |
|
|
$ |
134,438 |
|
Fuel gallons sold |
|
|
240,302 |
|
|
|
283,481 |
|
|
|
465,365 |
|
|
|
538,945 |
|
Same store fuel gallons sold decrease (%) 2 |
|
|
(6.5 |
%) |
|
|
(6.6 |
%) |
|
|
(6.4 |
%) |
|
|
(6.6 |
%) |
Fuel contribution 3 |
|
$ |
107,872 |
|
|
$ |
117,981 |
|
|
|
193,145 |
|
|
|
210,914 |
|
Fuel margin, cents per gallon 4 |
|
|
44.9 |
|
|
|
41.6 |
|
|
|
41.5 |
|
|
|
39.1 |
|
Same store fuel contribution 2, 3 |
|
$ |
104,214 |
|
|
$ |
105,054 |
|
|
$ |
187,241 |
|
|
$ |
191,329 |
|
Same store merchandise sales decrease (%) 2 |
|
|
(4.2 |
%) |
|
|
(5.1 |
%) |
|
|
(5.5 |
%) |
|
|
(4.6 |
%) |
Same store merchandise sales excluding cigarettes |
|
|
(3.0 |
%) |
|
|
(4.0 |
%) |
|
|
(4.1 |
%) |
|
|
(3.5 |
%) |
Merchandise contribution 5 |
|
$ |
134,485 |
|
|
$ |
155,759 |
|
|
$ |
252,055 |
|
|
$ |
290,677 |
|
Merchandise margin 6 |
|
|
33.6 |
% |
|
|
32.8 |
% |
|
|
33.4 |
% |
|
|
32.7 |
% |
1 Excludes the estimated fixed margin or fixed fee paid to GPMP for the cost of fuel.
2 Same store is a common metric used in the convenience store industry. We consider a store a same store beginning in the first quarter in which the store had a full quarter of activity in the prior year. Refer to “Use of Non-GAAP Measures” below for discussion of this measure.
3 Calculated as fuel revenue less fuel costs.
4 Calculated as fuel contribution divided by fuel gallons sold.
5 Calculated as merchandise revenue less merchandise costs.
6 Calculated as merchandise contribution divided by merchandise revenue.
The table below shows financial information and certain key metrics of the SpeedyQ Acquisition within the retail segment, for which there is only partial comparable information for the prior periods.
31
Table of Contents
|
For the Three Months Ended June 30, 2025 |
|
|
For the Six Months Ended June 30, 2025 |
|
||
|
SpeedyQ 1 |
|
|||||
|
(in thousands) |
|
|||||
Date of Acquisition: |
Apr 9, 2024 |
|
|||||
Revenues: |
|
|
|
|
|
||
Fuel revenue |
$ |
10,374 |
|
|
$ |
19,594 |
|
Merchandise revenue |
|
6,707 |
|
|
|
12,386 |
|
Other revenues, net |
|
252 |
|
|
|
506 |
|
Total revenues |
|
17,333 |
|
|
|
32,486 |
|
Operating expenses: |
|
|
|
|
|
||
Fuel costs 2 |
|
8,752 |
|
|
|
16,703 |
|
Merchandise costs |
|
4,505 |
|
|
|
8,379 |
|
Site operating expenses |
|
3,511 |
|
|
|
6,792 |
|
Total operating expenses |
|
16,768 |
|
|
|
31,874 |
|
Operating income |
$ |
565 |
|
|
$ |
612 |
|
Fuel gallons sold |
|
3,336 |
|
|
|
6,427 |
|
Fuel contribution 3 |
$ |
1,622 |
|
|
$ |
2,891 |
|
Merchandise contribution 4 |
$ |
2,202 |
|
|
$ |
4,007 |
|
Merchandise margin 5 |
|
32.8 |
% |
|
|
32.4 |
% |
1 Acquisition of 21 SpeedyQ retail stores.
2 Excludes the estimated fixed margin paid to GPMP for the cost of fuel.
3 Calculated as fuel revenue less fuel costs.
4 Calculated as merchandise revenue less merchandise costs.
5 Calculated as merchandise contribution divided by merchandise revenue.
Three Months Ended June 30, 2025 versus Three Months Ended June 30, 2024
Retail Revenues
For the three months ended June 30, 2025, fuel revenue decreased by $228.3 million, or 23.4%, compared to the second quarter of 2024. The decrease in fuel revenue was attributable to a decrease in gallons sold at same stores of approximately 6.5%, or 16.1 million gallons, reflecting the challenging macroeconomic environment, and a $0.33 per gallon decrease in the average retail price of fuel in the second quarter of 2025 compared to the second quarter of 2024, primarily due to market factors. Retail stores that we closed or converted to dealers in the trailing 12 month period also negatively impacted gallons sold by 26.8 million gallons.
For the three months ended June 30, 2025, merchandise revenue decreased by $74.1 million, or 15.6%, compared to the second quarter of 2024, primarily caused by a decline in customer transactions reflecting the challenging macroeconomic environment, and a decrease in merchandise revenue of $57.2 million from retail stores that we closed or converted to dealers in the trailing 12 month period. Same store merchandise sales decreased $16.6 million, or 4.2%, for the second quarter of 2025 compared to the second quarter of 2024. Approximately half of the decline in same store merchandise revenue resulted from lower revenues from cigarettes.
For the three months ended June 30, 2025, other revenues, net decreased by $2.1 million, or 12.6%, compared to the second quarter of 2024, primarily due to a decrease of $0.7 million in same store other revenues principally due to reduced lottery commissions and a decrease in other revenues of $1.4 million from retail stores that we closed or converted to dealers in the trailing 12 month period.
Retail Operating Income
For the three months ended June 30, 2025, fuel contribution decreased $10.1 million, or 8.6%, compared to the second quarter of 2024, primarily due to a $9.4 million decrease in fuel contribution related to retail stores that we closed or converted to dealers in the trailing 12 month period compared to the second quarter of 2024 and a same store fuel contribution decrease of $0.8 million. Fuel margin per gallon at same stores for the second quarter of 2025 increased to 45.0 cents per gallon from 42.4 cents per gallon for the second quarter of 2024.
For the three months ended June 30, 2025, merchandise contribution decreased $21.3 million, or 13.7%, compared to the second quarter of 2024, while merchandise margin increased to 33.6% from 32.8% in the prior period. The decrease in merchandise contribution was due to a $18.0 million decrease in merchandise contribution related to retail stores that we closed or converted to
32
Table of Contents
dealers in the trailing 12 month period and an approximately $3.7 million decrease in same store merchandise contribution. Same store merchandise margin was 33.8% in the second quarter of 2025 compared to 33.3% in the second quarter of 2024.
For the three months ended June 30, 2025, site operating expenses decreased $25.9 million, or 12.8%, compared to the three months ended June 30, 2024 primarily due $25.4 million of reduced expenses related to retail stores that we closed or converted to dealers in the trailing 12 month period, and a decrease in same store operating expenses of $1.4 million, or 0.8%, related to lower personnel costs and credit card fees, which were partially offset by incremental expenses related to the SpeedyQ Acquisition.
Six Months Ended June 30, 2025 versus Six Months Ended June 30, 2024
Retail Revenues
For the six months ended June 30, 2025, fuel revenue decreased by $362.0 million, or 20.1%, compared to the first half of 2025. The decrease in fuel revenue was attributable to a decrease in same store gallons sold of approximately 6.4%, or 30.6 million gallons, reflecting the challenging macroeconomic environment as well as severe weather conditions in January and February 2025 in certain of the markets in which we operate, and a $0.25 per gallon decrease in the average retail price of fuel in the first half of 2025 compared to the first half of 2024, primarily due to market factors. Retail stores which we closed or converted to dealers in the trailing 12 month period also negatively impacted gallons sold by 46.0 million gallons. Partially offsetting these decreases were an incremental 2.6 million gallons sold, or $6.2 million in fuel revenue, contributed by the SpeedyQ Acquisition.
For the six months ended June 30, 2025, merchandise revenue decreased by $134.3 million, or 15.1%, compared to the first half of 2024, primarily caused by a decline in customer transactions reflecting the challenging macroeconomic environment as well as severe weather conditions in January and February 2025 in certain of the markets in which we operate, and a decrease in merchandise revenue of $97.7 million from retail stores that we closed or converted to dealers in the trailing 12 month period. Same store merchandise sales decreased $42.2 million, or 5.5%, for the first half of 2025 compared to the first half of 2024. Approximately half of the decline in same store merchandise revenue was caused by lower revenues from cigarettes. The SpeedyQ Acquisition contributed approximately $5.6 million of incremental merchandise revenue.
For the six months ended June 30, 2025, other revenues, net decreased by $4.2 million, or 12.7%, compared to the first half of 2024, primarily due to a decrease of $2.1 million in same store other revenues principally due to reduced lottery commissions and a decrease in other revenues of $2.5 million from retail stores that we closed or converted to dealers in the trailing 12 month period, partially offset by additional income from the SpeedyQ Acquisition.
Retail Operating Income
For the six months ended June 30, 2025, fuel contribution decreased $17.8 million, or 8.4%, compared to the same period in 2024. The decrease in fuel contribution was due to a decrease of $15.2 million related to retail stores that we closed or converted to dealers in the trailing 12 month period. In addition, the same store fuel contribution decrease of $4.1 million was partially offset by incremental fuel contribution from the SpeedyQ Acquisition of approximately $1.2 million. Same store fuel margin per gallon for the first half of 2025 increased to 41.5 cents per gallon from 39.7 cents per gallon for the first half of 2024.
For the six months ended June 30, 2025, merchandise contribution decreased $38.6 million, or 13.3%, compared to the same period in 2024, while merchandise margin increased to 33.4% compared to 32.7% in the prior period. The decrease in merchandise contribution was due to a $30.8 million decrease related to retail stores that we closed or converted to dealers in the trailing 12 month period and a decrease in same store merchandise contribution of approximately $10.3 million, partially offset by $2.1 million in incremental merchandise contribution from the SpeedyQ Acquisition. Same store merchandise margin was 33.5% in the first half of 2025 compared to 33.0% in the first half of 2024.
For the six months ended June 30, 2025, site operating expenses decreased $46.7 million, or 11.7%, compared to the six months ended June 30, 2024, primarily due $47.6 million of reduced expenses related to retail stores that we closed or converted to dealers in the trailing 12 month period, and a decrease in same store operating expenses of $3.7 million, or 1.1%, related to lower personnel costs and credit card fees partially offset by higher snow removal expenses resulting from severe weather conditions in certain of the markets in which we operate. These decreases were partially offset by $3.7 million of incremental expenses related to the SpeedyQ Acquisition.
33
Table of Contents
Wholesale Segment
The table below shows the results of the wholesale segment for the three and six months ended June 30, 2025 and 2024, together with certain key metrics for the segment.
|
|
For the Three Months |
|
|
For the Six Months |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Revenues: |
|
(in thousands) |
|
|||||||||||||
Fuel revenue |
|
$ |
696,671 |
|
|
$ |
762,693 |
|
|
$ |
1,326,163 |
|
|
$ |
1,427,207 |
|
Other revenues, net |
|
|
12,501 |
|
|
|
6,850 |
|
|
|
22,853 |
|
|
|
13,708 |
|
Total revenues |
|
|
709,172 |
|
|
|
769,543 |
|
|
|
1,349,016 |
|
|
|
1,440,915 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fuel costs 1 |
|
|
671,282 |
|
|
|
738,707 |
|
|
|
1,280,727 |
|
|
|
1,382,491 |
|
Site operating expenses |
|
|
14,648 |
|
|
|
9,566 |
|
|
|
26,417 |
|
|
|
18,865 |
|
Total operating expenses |
|
|
685,930 |
|
|
|
748,273 |
|
|
|
1,307,144 |
|
|
|
1,401,356 |
|
Operating income |
|
$ |
23,242 |
|
|
$ |
21,270 |
|
|
$ |
41,872 |
|
|
$ |
39,559 |
|
Fuel gallons sold – fuel supply locations |
|
|
213,529 |
|
|
|
203,561 |
|
|
|
404,606 |
|
|
|
390,292 |
|
Fuel gallons sold – consignment agent locations |
|
|
38,929 |
|
|
|
39,338 |
|
|
|
75,444 |
|
|
|
76,842 |
|
Fuel margin, cents per gallon 2 – fuel supply locations |
|
|
6.3 |
|
|
|
6.0 |
|
|
|
6.2 |
|
|
|
6.1 |
|
Fuel margin, cents per gallon 2 – consignment agent locations |
|
|
30.6 |
|
|
|
29.7 |
|
|
|
27.2 |
|
|
|
27.2 |
|
1 Excludes the estimated fixed margin or fixed fee paid to GPMP for the cost of fuel.
2 Calculated as fuel revenue less fuel costs divided by fuel gallons sold.
Note: Comparable wholesale sites exclude retail stores converted to dealers, until the first quarter in which these sites had a full quarter of wholesale activity in the prior year.
Three Months Ended June 30, 2025 versus Three Months Ended June 30, 2024
Wholesale Revenues
For the three months ended June 30, 2025, fuel revenue decreased by $66.0 million, or 8.7%, compared to the second quarter of 2024, primarily due to a decrease in the average price of fuel in the second quarter of 2025 compared to the second quarter of 2024, partially offset by a 9.6 million, or 3.9%, increase in gallons sold. Of total gallons sold, the retail stores that we converted to dealers in the trailing 12 month period contributed 19.4 million gallons, which were partially offset by lower volumes at comparable wholesale sites.
Wholesale Operating Income
For the three months ended June 30, 2025, wholesale operating income increased $2.0 million, compared to the second quarter of 2024. Additional operating income from retail sites converted to dealers in the trailing 12 month period more than offset reduced operating income at comparable wholesale sites. An increase of approximately $5.7 million in other revenues, net, combined with an increase in fuel contribution of approximately $1.4 million was partially offset by an increase in site operating expenses of $5.1 million in the second quarter of 2025 compared to the second quarter of 2024. These increases were primarily due to retail stores we converted to dealers in the trailing 12 month period.
At fuel supply locations, fuel contribution increased by $1.2 million, and fuel margin per gallon also increased for the second quarter of 2025 compared to the second quarter of 2024, due to incremental contribution from the retail stores converted to dealers of $1.7 million, which was partially offset by lower volumes at comparable wholesale sites.
At consignment agent locations, fuel contribution increased $0.2 million, and fuel margin per gallon also increased for the second quarter of 2025 compared to the second quarter of 2024, due to the incremental contribution of $0.5 million from retail stores converted to dealers, which was partially offset by lower volumes at comparable wholesale sites.
Six Months Ended June 30, 2025 versus Six Months Ended June 30, 2024
Wholesale Revenues
For the six months ended June 30, 2025, fuel revenue decreased by $101.0 million, or 7.1%, compared to the first half of 2024, primarily due to a decrease in the average price of fuel in the first half of 2025 compared to the first half of 2024, partially offset by a
34
Table of Contents
$12.9 million, or 2.8%, increase in gallons sold. Of total gallons sold, the retail stores that we converted to dealers in the trailing 12 month period contributed 33.1 million gallons, which were partially offset by lower volumes at comparable wholesale sites.
Wholesale Operating Income
For the six months ended June 30, 2025, wholesale operating income increased $2.3 million, compared to the first half of 2024. Additional operating income from retail sites converted to dealers in the trailing 12 month period more than offset reduced operating income at comparable wholesale sites. An increase of approximately $9.1 million in other revenues, net, combined with an increase in fuel contribution of approximately $0.7 million, which was partially offset by an increase in site operating expenses of $7.6 million in the first half of 2025 compared to the first half of 2024. These increases were primarily due to retail stores we converted to dealers in the trailing 12 month period.
At fuel supply locations, fuel contribution increased by $1.1 million, and fuel margin per gallon also increased for the first half of 2025 compared to the first half of 2024, due to $2.6 million of incremental contribution from the retail stores converted to dealers, which was partially offset by lower volumes at comparable wholesale sites primarily due to severe weather conditions in January and February 2025 in certain of the markets in which we operate.
At consignment agent locations, fuel contribution decreased $0.4 million due to lower volumes at comparable wholesale sites primarily due to severe weather conditions in January and February 2025 in certain of the markets in which we operate, which was partially offset by the incremental contribution of $0.8 million from retail stores converted to dealers. Fuel margin per gallon for the first half of 2025 remained consistent with the first half of 2024, impacted by a change in the composition of consignment agent locations compared to the first half of 2024.
Fleet Fueling Segment
The table below shows the results of the fleet fueling segment for the three and six months ended June 30, 2025 and 2024, together with certain key metrics for the segment.
|
|
For the Three Months |
|
|
For the Six Months |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Revenues: |
|
(in thousands) |
|
|||||||||||||
Fuel revenue |
|
$ |
118,121 |
|
|
$ |
140,140 |
|
|
$ |
236,527 |
|
|
$ |
272,333 |
|
Other revenues, net |
|
|
2,245 |
|
|
|
2,284 |
|
|
|
4,363 |
|
|
|
4,669 |
|
Total revenues |
|
|
120,366 |
|
|
|
142,424 |
|
|
|
240,890 |
|
|
|
277,002 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fuel costs 1 |
|
|
100,353 |
|
|
|
122,280 |
|
|
|
203,457 |
|
|
|
240,557 |
|
Site operating expenses |
|
|
6,934 |
|
|
|
6,442 |
|
|
|
13,362 |
|
|
|
12,985 |
|
Total operating expenses |
|
|
107,287 |
|
|
|
128,722 |
|
|
|
216,819 |
|
|
|
253,542 |
|
Operating income |
|
$ |
13,079 |
|
|
$ |
13,702 |
|
|
$ |
24,071 |
|
|
$ |
23,460 |
|
Fuel gallons sold – proprietary cardlock locations |
|
|
32,997 |
|
|
|
35,678 |
|
|
|
64,915 |
|
|
|
69,127 |
|
Fuel gallons sold – third-party cardlock locations |
|
|
3,293 |
|
|
|
3,271 |
|
|
|
6,468 |
|
|
|
6,470 |
|
Fuel margin, cents per gallon 2 – proprietary cardlock locations |
|
|
51.7 |
|
|
|
49.1 |
|
|
|
49.0 |
|
|
|
45.1 |
|
Fuel margin, cents per gallon 2 – third-party cardlock locations |
|
|
21.2 |
|
|
|
10.1 |
|
|
|
20.0 |
|
|
|
8.9 |
|
1 Excludes the estimated fixed fee paid to GPMP for the cost of fuel.
2 Calculated as fuel revenue less fuel costs divided by fuel gallons sold.
Three Months Ended June 30, 2025 versus Three Months Ended June 30, 2024
Fleet Fueling Revenues
For the three months ended June 30, 2025, fuel revenue decreased by $22.0 million, or 15.7%, compared to the second quarter of 2024. Fleet fueling revenues were negatively impacted by a 6.8% decrease in gallons sold primarily due to movements in crude oil pricing that impacted certain markets in which we operate, and a decrease in the average price of fuel in the second quarter of 2025 compared to the second quarter of 2024.
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Table of Contents
Fleet Fueling Operating Income
For the three months ended June 30, 2025, fuel contribution decreased by $0.1 million compared to the second quarter of 2024. At proprietary cardlocks, fuel contribution decreased by $0.5 million, while fuel margin per gallon increased for the second quarter of 2025 compared to the second quarter of 2024, primarily due to favorable diesel margins. At third-party cardlock locations, fuel contribution increased $0.4 million, and fuel margin per gallon also increased for the second quarter of 2025 compared to the second quarter of 2024, primarily due to the closure of underperforming third-party locations.
For the three months ended June 30, 2025, site operating expenses increased $0.5 million compared to the three months ended June 30, 2024.
Six Months Ended June 30, 2025 versus Six Months Ended June 30, 2024
Fleet Fueling Revenues
For the six months ended June 30, 2025, fuel revenue decreased by $35.8 million, or 13.1%, compared to the first half of 2024. Fleet fueling revenues were negatively impacted a 5.6% decrease in gallons sold due primarily to movements in crude oil pricing and severe weather conditions in January and February 2025 that impacted certain of the markets in which we operate, and a decrease in the average price of fuel in the first half of 2025 compared to the first half of 2024.
Fleet Fueling Operating Income
For the six months ended June 30, 2025, fuel contribution increased by $1.3 million compared to the first half of 2024. At proprietary cardlocks, fuel contribution increased by $0.6 million, and fuel margin per gallon also increased for the first half of 2025 compared to the first half of 2024, primarily due to favorable diesel margins. At third-party cardlock locations, fuel contribution increased $0.7 million, and fuel margin per gallon also increased for the first half of 2025 compared to the first half of 2024, primarily due to the closure of underperforming third-party locations.
For the six months ended June 30, 2025, site operating expenses increased $0.4 million compared to the six months ended June 30, 2024.
GPMP Segment
The table below shows the results of the GPMP segment for the three and six months ended June 30, 2025 and 2024, together with certain key metrics for the segment.
|
|
For the Three Months |
|
|
For the Six Months |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Revenues: |
|
(in thousands) |
|
|||||||||||||
Fuel revenue – inter-segment 1 |
|
$ |
1,005,970 |
|
|
$ |
1,280,016 |
|
|
$ |
1,943,788 |
|
|
$ |
2,379,867 |
|
Fuel revenue – external customers |
|
|
353 |
|
|
|
990 |
|
|
|
849 |
|
|
|
2,195 |
|
Other revenues, net |
|
|
191 |
|
|
|
222 |
|
|
|
346 |
|
|
|
429 |
|
Other revenues, net – inter-segment 1 |
|
|
2,816 |
|
|
|
2,854 |
|
|
|
5,529 |
|
|
|
5,544 |
|
Total revenues |
|
|
1,009,330 |
|
|
|
1,284,082 |
|
|
|
1,950,512 |
|
|
|
2,388,035 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fuel costs |
|
|
982,722 |
|
|
|
1,255,682 |
|
|
|
1,899,310 |
|
|
|
2,333,503 |
|
General and administrative expenses |
|
|
820 |
|
|
|
801 |
|
|
|
1,648 |
|
|
|
1,762 |
|
Depreciation and amortization |
|
|
1,840 |
|
|
|
1,843 |
|
|
|
3,680 |
|
|
|
3,687 |
|
Total operating expenses |
|
|
985,382 |
|
|
|
1,258,326 |
|
|
|
1,904,638 |
|
|
|
2,338,952 |
|
Operating income |
|
$ |
23,948 |
|
|
$ |
25,756 |
|
|
$ |
45,874 |
|
|
$ |
49,083 |
|
Fuel gallons sold – inter-segment |
|
|
472,028 |
|
|
|
506,453 |
|
|
|
906,546 |
|
|
|
968,961 |
|
Fuel gallons sold – external customers |
|
|
69 |
|
|
|
182 |
|
|
|
217 |
|
|
|
539 |
|
Fuel margin, cents per gallon 2 |
|
|
5.0 |
|
|
|
5.0 |
|
|
|
5.0 |
|
|
|
5.0 |
|
1 Includes the estimated fixed margin or fixed fee paid to GPMP for the cost of fuel.
2 Calculated as fuel revenue less fuel costs divided by fuel gallons sold.
36
Table of Contents
Three Months Ended June 30, 2025 versus Three Months Ended June 30, 2024
GPMP Revenues
For the three months ended June 30, 2025, fuel revenue decreased by $274.7 million, or 21.4%, compared to the second quarter of 2024. The decrease in fuel revenue was attributable primarily to a decrease in the average price of fuel compared to the second quarter of 2024 and fewer gallons sold in the second quarter of 2025 compared to the second quarter of 2024.
For the three months ended June 30, 2025 and 2024, other revenues, net and inter-segment other revenues, net related to the fixed fee primarily charged to sites in the fleet fueling segment (currently 5.0 cents per gallon sold) were similar.
GPMP Operating Income
Fuel margin decreased by $1.7 million for the second quarter of 2025 compared to the second quarter of 2024, primarily due to fewer gallons sold to the retail segment at a fixed margin.
For the three months ended June 30, 2025, total general, administrative, depreciation and amortization expenses remained consistent with the second quarter of 2024.
Six Months Ended June 30, 2025 versus Six Months Ended June 30, 2024
GPMP Revenues
For the six months ended June 30, 2025, fuel revenue decreased by $437.4 million, or 18.4%, compared to the first half of 2024. The decrease in fuel revenue was attributable to a decrease in both gallons sold and the average price of fuel for the first half of 2025 as compared to the first half of 2024.
For the six months ended June 30, 2025 and 2024, other revenues, net, and inter-segment other revenues, net related to the fixed fee primarily charged to sites in the fleet fueling segment (currently 5.0 cents per gallon sold) were similar.
GPMP Operating Income
Fuel margin decreased by $3.2 million for the first half of 2025, compared to the first half of 2024, primarily due to fewer gallons sold to the retail segment at a fixed margin.
For the six months ended June 30, 2025, total general and administrative expenses decreased $0.1 million compared to the first half of 2024, and depreciation and amortization expenses for the first half of 2025 remained consistent with the first half of 2024.
Use of Non-GAAP Measures
We disclose certain measures on a “same store basis,” which is a non-GAAP measure. Information disclosed on a “same store basis” excludes the results of any store that is not a “same store” for the applicable period. A store is considered a same store beginning in the first quarter in which the store had a full quarter of activity in the prior year. We believe that this information provides greater comparability regarding our ongoing operating performance. Neither this measure nor those described below should be considered an alternative to measurements presented in accordance with generally accepted accounting principles in the United States (“GAAP”).
We define EBITDA as net income (loss) before net interest expense, income taxes, depreciation and amortization. Adjusted EBITDA further adjusts EBITDA by excluding the gain or loss on disposal of assets, impairment charges, acquisition and divestiture costs, share-based compensation expense, other non-cash items, and other unusual or non-recurring charges. Both EBITDA and Adjusted EBITDA are non-GAAP financial measures.
We use EBITDA and Adjusted EBITDA for operational and financial decision-making and believe these measures are useful in evaluating our performance because they eliminate certain items that we do not consider indicators of our operating performance. EBITDA and Adjusted EBITDA are also used by many of our investors, securities analysts, and other interested parties in evaluating our operational and financial performance across reporting periods. We believe that the presentation of EBITDA and Adjusted EBITDA provides useful information to investors by allowing an understanding of key measures that we use internally for operational decision-making, budgeting, evaluating acquisition targets, and assessing our operating performance.
EBITDA and Adjusted EBITDA are not recognized terms under GAAP and should not be considered as a substitute for net income (loss) or any other financial measure presented in accordance with GAAP. These measures have limitations as analytical tools, and should not be considered in isolation or as substitutes for analysis of our results as reported under GAAP. We strongly encourage investors to review our financial statements and publicly filed reports in their entirety and not to rely on any single financial measure.
37
Table of Contents
Because non-GAAP financial measures are not standardized, same store measures, EBITDA and Adjusted EBITDA, as defined by us, may not be comparable to similarly titled measures reported by other companies. It therefore may not be possible to compare our use of these non-GAAP financial measures with those used by other companies.
The following table contains a reconciliation of net income to EBITDA and Adjusted EBITDA for the three and six months ended June 30, 2025 and 2024.
|
|
For the Three Months |
|
|
For the Six Months |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
|
|
(in thousands) |
|
|||||||||||||
Net income |
|
$ |
20,098 |
|
|
$ |
14,063 |
|
|
$ |
7,426 |
|
|
$ |
13,469 |
|
Interest and other financing expenses, net |
|
|
19,518 |
|
|
|
21,367 |
|
|
|
33,369 |
|
|
|
23,824 |
|
Income tax expense |
|
|
17,100 |
|
|
|
7,546 |
|
|
|
4,178 |
|
|
|
839 |
|
Depreciation and amortization |
|
|
33,602 |
|
|
|
33,577 |
|
|
|
68,489 |
|
|
|
65,293 |
|
EBITDA |
|
|
90,318 |
|
|
|
76,553 |
|
|
|
113,462 |
|
|
|
103,425 |
|
Acquisition and divestiture costs (a) |
|
|
1,132 |
|
|
|
1,510 |
|
|
|
2,282 |
|
|
|
2,190 |
|
(Gain) loss on disposal of assets and impairment |
|
|
(18,226 |
) |
|
|
721 |
|
|
|
(16,698 |
) |
|
|
3,385 |
|
Share-based compensation expense (c) |
|
|
3,658 |
|
|
|
2,784 |
|
|
|
6,994 |
|
|
|
6,113 |
|
Income from equity investment (d) |
|
|
(26 |
) |
|
|
(28 |
) |
|
|
(47 |
) |
|
|
(50 |
) |
Fuel and franchise taxes received in arrears (e) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(565 |
) |
Adjustment to contingent consideration (f) |
|
|
(209 |
) |
|
|
(310 |
) |
|
|
(275 |
) |
|
|
(292 |
) |
Expenses related to wage and hour claim settlement (g) |
|
|
— |
|
|
|
— |
|
|
|
2,023 |
|
|
|
— |
|
Other (h) |
|
|
291 |
|
|
|
(1,160 |
) |
|
|
52 |
|
|
|
(971 |
) |
Adjusted EBITDA |
|
$ |
76,938 |
|
|
$ |
80,070 |
|
|
$ |
107,793 |
|
|
$ |
113,235 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Additional information |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-cash rent expense (i) |
|
$ |
3,103 |
|
|
$ |
3,687 |
|
|
$ |
6,410 |
|
|
$ |
7,171 |
|
38
Table of Contents
Liquidity and Capital Resources
Our primary sources of liquidity are cash flows from operations, availability under our credit facilities and our cash balances. Our principal liquidity requirements are the financing of current operations, funding capital expenditures (including acquisitions), and servicing debt. We finance our inventory purchases primarily from customary trade credit aided by relatively rapid inventory turnover, as well as cash generated from operations. Rapid inventory turnover allows us to conduct operations without the need for large amounts of cash and working capital. We largely rely on internally generated cash flows and borrowings for operations, which we believe are sufficient to meet our liquidity needs for the foreseeable future.
Our ability to meet our debt service obligations and other capital requirements, including capital expenditures, as well as the cost of acquisitions, will depend on our future operating performance which, in turn, will be subject to general economic, financial, business, competitive, legislative, regulatory and other conditions, many of which are beyond our control. As a normal part of our business, we will from time to time consider opportunities to repay, redeem, repurchase or refinance our indebtedness, depending on market conditions. Changes in our operating plans, lower than anticipated sales, increased expenses, acquisitions, or other events may cause us to seek additional debt or equity financing in future periods. Additional debt financing could impose increased cash payment obligations, as well as covenants that may restrict our operations. There can be no guarantee that financing will be available on acceptable terms or at all. As of June 30, 2025, approximately 51% of our debt bore interest at variable rates, similar to December 31, 2024, which increases our interest rate risk and may require that we use more of our cash flow for the payment of interest if prevailing interest rates increase or we incur additional indebtedness under our variable rate facilities or otherwise. See also “Quantitative and Qualitative Disclosures about Market Risk—Interest Rate Risk.”
As of June 30, 2025, we were in a strong liquidity position of approximately $875 million, consisting of approximately $294 million of cash and cash equivalents and approximately $582 million of availability under our lines of credit available for certain purposes. This liquidity position currently provides us with adequate funding to satisfy our contractual and other obligations from our existing cash balances. As of June 30, 2025, we had no outstanding borrowings under our $140.0 million PNC Line of Credit (as defined below), $31.3 million of unused availability under the M&T equipment line of credit, described below, and $418.7 million of unused availability under our $800 million Capital One Line of Credit (as defined below), which we may elect to increase up to $1.0 billion, subject to obtaining additional financing commitments from current lenders or other banks, and subject to certain other terms.
The Board declared, and the Company paid, dividends of $0.03 per share of common stock on each of March 21, 2025 and May 30, 2025, totaling approximately $6.9 million. Additionally, the Board declared a quarterly dividend of $0.03 per share of common stock, to be paid on August 29, 2025 to stockholders of record as of August 18, 2025. The amount and timing of dividends payable on our common stock are within the sole discretion of our Board, which will evaluate dividend payments within the context of our overall capital allocation strategy on an ongoing basis, giving consideration to our current and forecast earnings, financial condition, cash requirements and other factors. There can be no assurance that we will continue to pay such dividends or the amounts of such dividends.
We have a share repurchase program for up to an aggregate of $125.0 million of our outstanding shares of common stock. During the six months ended June 30, 2025, we repurchased approximately 3.5 million shares of common stock under the share repurchase program for approximately $14.3 million, or an average price of $4.07 per share. The share repurchase program does not have a stated expiration date. Whether and the extent to which we repurchase shares depends on a number of factors, including our financial condition, capital requirements, cash flows, results of operations, future business prospects and other factors management may deem relevant. The timing, volume, and nature of repurchases are subject to market conditions, applicable securities laws, and other factors, and the program may be amended, suspended or discontinued at any time. Repurchases may be effected from time to time through open market purchases, including pursuant to a pre-set trading plan meeting the requirements of Rule 10b5-1(c) of the Exchange Act, privately negotiated transactions, pursuant to accelerated share repurchase agreements entered into with one or more counterparties, or otherwise.
To date, we have funded capital expenditures primarily through funds generated from operations, funds received from vendors, sale-leaseback transactions, the issuance of debt and existing cash. Future capital required to finance operations, acquisitions, and raze-and-rebuild, functionally remodel and fully remodel and update stores is expected to come from cash on hand, cash generated by operations, availability under lines of credit, and additional long-term debt and equipment leases, as circumstances may dictate. In the short- to medium-term, we currently expect that our capital spending program will be primarily focused on remodeling and updating stores, including as part of our Transformation Plan, and maintaining our properties and equipment. In the medium- to long-term, we currently expect that our capital spending program will align with our Transformation Plan. We do not expect such capital needs to adversely affect liquidity. We expect to remain opportunistic with respect to the expansion of our store base through acquisitions, and we will evaluate such opportunities in concert with our capital spending program.
Cash Flows for the Six Months Ended June 30, 2025 and 2024
39
Table of Contents
Net cash provided by (used in) operating activities, investing activities and financing activities for the six months ended June 30, 2025 and 2024 was as follows:
|
|
For the Six Months Ended June 30, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
|
|
(in thousands) |
|
|||||
Net cash provided by (used in): |
|
|
|
|
|
|
||
Operating activities |
|
$ |
98,587 |
|
|
$ |
89,974 |
|
Investing activities |
|
|
(70,432 |
) |
|
|
(52,647 |
) |
Financing activities |
|
|
(4,106 |
) |
|
|
(27,671 |
) |
Effect of exchange rates |
|
|
30 |
|
|
|
(38 |
) |
Total |
|
$ |
24,079 |
|
|
$ |
9,618 |
|
Operating Activities
Cash flows provided by operations are our main source of liquidity. We have historically relied primarily on cash provided by operating activities, supplemented as necessary from time to time by borrowings on our credit facilities and other debt or equity transactions to finance our operations and to fund our capital expenditures. Cash flow provided by operating activities is primarily impacted by our net income and changes in working capital.
For the six months ended June 30, 2025, cash flows provided by operating activities were $98.6 million compared to $90.0 million for the six months ended June 30, 2024. The increase in 2025 as compared to the prior year period was primarily the result of deposits received from dealers (including deposits related to retail stores we expect to convert to dealer locations), incremental vendor incentives received, and lower net interest payments, which were partially offset by higher tax payments and a decrease in Adjusted EBITDA.
Investing Activities
Cash flows used in investing activities primarily reflect capital expenditures for acquisitions and replacing and maintaining existing facilities and equipment used in the business.
For the six months ended June 30, 2025, cash used in investing activities decreased by $17.8 million compared to the six months ended June 30, 2024. For the six months ended June 30, 2025, we used $72.7 million for capital expenditures, including the purchase of 23 fee properties, investments in NTI stores and remodeling of the new format stores, EV chargers, upgrades to fuel dispensers and other investments in our stores.
Financing Activities
Cash flows from financing activities primarily consist of increases and decreases in the principal amount outstanding under our lines of credit and other indebtedness, and issuance of common stock, net of dividends paid and common stock repurchases.
For the six months ended June 30, 2025, financing activities consisted primarily of net proceeds of $25.1 million for long-term debt, repayments of $2.8 million for financing leases, $6.9 million for dividend payments on common stock, $2.9 million for dividend payments on the Series A redeemable preferred stock and $16.6 million for common stock repurchases. Cash flows from financing activities for the six months ended June 30, 2024 were impacted by payment of the deferred consideration owed for the TEG acquisition, including the repurchase of shares originally issued as payment of deferred consideration and the settlement of deferred consideration related to the TEG acquisition.
Credit Facilities and Senior Notes
Senior Notes
As of June 30, 2025, the Company had outstanding $450 million aggregate principal amount of its 5.125% Senior Notes due 2029 (the “Senior Notes”). Issued in October 2021, the Senior Notes are guaranteed, on an unsecured senior basis, by certain of the Company’s wholly owned domestic subsidiaries (the “Guarantors”). The indenture governing the Senior Notes contains customary restrictive covenants that, among other things, generally limit the ability of the Company and substantially all of its subsidiaries to (i) create liens, (ii) pay dividends, acquire shares of capital stock and make payments on subordinated debt, (iii) place limitations on distributions from certain subsidiaries, (iv) issue or sell the capital stock of certain subsidiaries, (v) sell assets, (vi) enter into transactions with affiliates, (vii) effect mergers and (viii) incur indebtedness. The Senior Notes and the guarantees rank equally in right of payment with all of the Company’s and the Guarantors’ respective existing and future senior unsubordinated indebtedness and are effectively subordinated to all of the Company’s and the Guarantors’ existing and future secured indebtedness to the extent of the
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value of the collateral securing such indebtedness; and are structurally subordinated to any existing and future obligations of subsidiaries of the Company that are not Guarantors.
Financing Agreement with PNC
GPM and certain subsidiaries have a financing arrangement (as amended, the “PNC Credit Agreement”) with PNC Bank National Association (“PNC”) to provide a line of credit with an aggregate principal amount of up to $140 million for purposes of financing working capital (the “PNC Line of Credit”).
The PNC Line of Credit bears interest, as elected by GPM at: (a) SOFR Adjusted plus Term SOFR (as defined in the PNC Credit Agreement) plus a margin of 1.25% to 1.75% or (b) a rate per annum equal to the alternate base rate (as defined in the PNC Credit Agreement) plus a margin of 0% to 0.50%. Every quarter, the SOFR margin rate and the alternate base rate margin rate are updated based on the quarterly average undrawn availability of the line of credit. The calculation of the availability under the PNC Line of Credit is determined monthly subject to terms and limitations as set forth in the PNC Credit Agreement, taking into account the balances of receivables, inventory and letters of credit, among other things. As of June 30, 2025, $8.2 million of letters of credit were outstanding under the PNC Credit Agreement.
Financing Agreements with M&T Bank
GPM has a financing arrangement with M&T Bank (the “M&T Credit Agreement”) that provides a line of credit for up to $45.0 million to purchase equipment on or before September 2026, which may be borrowed in tranches, as well as an aggregate original principal amount, as amended in May 2025, of $83.7 million of real estate loans (the “M&T Term Loans”). As of June 30, 2025, approximately $31.3 million remained available under the equipment line of credit.
Each additional equipment loan tranche will have a term of up to five years after the date of the applicable tranche’s issuance, payable in equal monthly payments of principal plus interest, and the May 2025 amendment of the M&T Credit Agreement also provided that additional and existing borrowings under the equipment line of credit accrue interest, at GPM’s discretion, at either a fixed rate based on M&T Bank’s five-year cost of funds as of the applicable date of each tranche plus 2.25%, or a floating rate at SOFR plus 2.25%. In addition, following such amendment, the M&T Term Loans bear interest at SOFR plus 2.25%, mature in June 2026, November 2028 or May 2030 (depending on the loan) and are payable in monthly installments based on a fifteen-year amortization schedule, with the balance of each loan payable at maturity.
Financing Agreement with a Syndicate of Banks Led by Capital One, National Association (“Capital One”)
GPMP has a revolving credit facility with a syndicate of banks led by Capital One, National Association, in an aggregate principal amount of up to $800 million (the “Capital One Line of Credit”). At GPMP’s request, the Capital One Line of Credit can be increased up to $1.0 billion, subject to obtaining additional financing commitments from current lenders or from other banks, and subject to certain terms as detailed in the Capital One Line of Credit. The Capital One Line of Credit is available for general GPMP purposes, including working capital, capital expenditures and permitted acquisitions.
The Capital One Line of Credit matures on May 5, 2028. As of June 30, 2025, approximately $380.8 million was drawn on the Capital One Line of Credit, $0.5 million of letters of credit were outstanding under the Capital One Line of Credit and approximately $418.7 million was available thereunder.
The Capital One Line of Credit bears interest, as elected by GPMP at: (a) Adjusted Term SOFR (as defined in the agreement) plus a margin of 2.25% to 3.25% or (b) a rate per annum equal to the alternate base rate (as defined in the agreement) plus a margin of 1.25% to 2.25%. The margin is determined according to a formula in the Capital One Line of Credit that depends on GPMP’s leverage.
Critical Accounting Estimates
For the six months ended June 30, 2025, there were no material changes to our critical accounting estimates described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 that have had a material impact on our condensed consolidated financial statements and related notes.
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Item 3. Quantitative and Qualitative Disclosures about Market Risk
Commodity Price Risk
We have limited exposure to commodity price risk as a result of the payment and volume-related discounts in certain of our fuel supply contracts with our fuel suppliers, which are based on the market price of motor fuel. Significant increases in fuel prices could result in significant increases in the retail price of fuel and in lower sales to consumers and dealers. When fuel prices rise, some of our dealers may have insufficient credit to purchase fuel from us at their historical volumes. In addition, significant and persistent increases in the retail price of fuel could also diminish consumer demand, which could subsequently diminish the volume of fuel we distribute. A significant percentage of our sales are made with the use of credit cards. Because the interchange fees we pay when credit cards are used to make purchases are based on transaction amounts, higher fuel prices at the pump and higher gallon movements result in higher credit card expenses. These additional fees increase operating expenses. From time to time, we make use of derivative commodity instruments to manage risks associated with an immaterial number of gallons designed to offset changes in the price of fuel that are directly tied to firm commitments to purchase diesel fuel.
Interest Rate Risk
We may be subject to market risk from exposure to changes in interest rates based on our financing, investing, and cash management activities. The Senior Notes bear a fixed interest rate, therefore, an increase or decrease in prevailing interest rates has no impact on our debt service for the Senior Notes. As of June 30, 2025, the interest rate on our Capital One Line of Credit was 7.4%, the interest rate on our M&T Term Loans was 6.6% and the interest rate on the variable portion of our M&T equipment loan was 6.6% (approximately $12.6 million of the total loan). As of June 30, 2024, the interest rate on our Capital One Line of Credit was 8.2%, the interest rate on our M&T Term Loans was 8.3% and the interest rate on the variable portion of our M&T equipment loan was 8.1% (approximately $14.7 million of the total loan). As of June 30, 2025, approximately 51% of our debt bore interest at variable rates. Based on the outstanding balances as of June 30, 2025, if our applicable interest rates each increase by 1%, then our debt service on an annual basis would increase by approximately $4.7 million. Interest rates on commercial bank borrowings and debt offerings could be higher than current levels, causing our financing costs to increase accordingly. Although this could limit our ability to raise funds in the debt capital markets, we expect to remain competitive with respect to acquisitions and capital projects, as our competitors would likely face similar circumstances.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)) under the Exchange Act as of the end of the period covered by this Quarterly Report on Form 10-Q. Our disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the Securities and Exchange Commission. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Based on management’s evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective as of June 30, 2025.
Changes to the Company’s Internal Control Over Financial Reporting
There were no changes to the Company’s internal control over financial reporting that occurred during the calendar quarter covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Information with respect to this item may be found in Note 11 to the Quarterly Financial Statements, which information is incorporated herein by reference.
Item 1A. Risk Factors
During the reporting period covered by this Quarterly Report on Form 10-Q, there have been no material changes to our risk factors as set forth in our Annual Report on Form 10-K for the year ended December 31, 2024.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The following table presents our share repurchase activity for the quarter ended June 30, 2025 (dollars in thousands, except per share amounts):
Period |
|
Total Number of Shares Purchased |
|
|
Average Price Paid per Share |
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) |
|
|
Maximum Dollar Value that May Yet Be Purchased Under the Plans or Programs (1) |
|
||||
April 1, 2025 to April 30, 2025 |
|
|
1,286,738 |
|
|
$ |
3.96 |
|
|
|
1,286,738 |
|
|
$ |
15,388 |
|
May 1, 2025 to May 31, 2025 |
|
|
415,203 |
|
|
|
4.26 |
|
|
|
415,203 |
|
|
|
13,620 |
|
June 1, 2025 to June 30, 2025 |
|
|
525,133 |
|
|
|
4.38 |
|
|
|
525,133 |
|
|
|
11,320 |
|
Total |
|
|
2,227,074 |
|
|
$ |
4.11 |
|
|
|
2,227,074 |
|
|
$ |
11,320 |
|
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not Applicable.
Item 5. Other Information
During the three months ended June 30, 2025, none of our officers or directors
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Item 6. Exhibits
Exhibit 10.1+ |
|
Amendment to Third Amended and Restated Credit Agreement, dated May 13, 2025, by and among GPM Investments, LLC, and the other borrowers party thereto and M&T Bank (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed on May 15, 2025). |
|
|
|
Exhibit 10.2 |
|
Third Amended and Restated Master Covenant Agreement, dated May 13, 2025, by and between GPM Investments, LLC and M&T Bank (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K, filed on May 15, 2025). |
|
|
|
Exhibit 31.1* |
|
Certification by Arie Kotler, Chairman of the Board, President and Chief Executive Officer, pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities and Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for the quarterly period ended June 30, 2025. |
|
|
|
Exhibit 31.2* |
|
Certification by Robert Giammatteo, Executive Vice President and Chief Financial Officer, pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities and Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for the quarterly period ended June 30, 2025. |
|
|
|
Exhibit 32.1** |
|
Certification by Arie Kotler, Chairman of the Board, President and Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the quarterly period ended June 30, 2025. |
|
|
|
Exhibit 32.2** |
|
Certification by Robert Giammatteo, Executive Vice President and Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the quarterly period ended June 30, 2025. |
|
|
|
101 |
|
The following financial statements from the Company’s Form 10-Q for the quarter ended June 30, 2025, formatted in Inline XBRL: (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Changes in Equity, (iv) Condensed Consolidated Statements of Cash Flows, and (v) Notes to Condensed Consolidated Financial Statements |
|
|
|
104 |
|
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* Filed herewith.
** Furnished herewith.
+ Pursuant to Item 601(a)(5) of Regulation S-K, schedules and similar attachments to this exhibit have been omitted because they do not contain information material to an investment or voting decision and such information is not otherwise disclosed in such exhibit. The Company will supplementally provide a copy of any omitted schedule or similar attachment to the U.S. Securities and Exchange Commission or its staff upon request.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: August 6, 2025 |
|
ARKO Corp. |
|
|
|
|
By: |
/s/ Robert Giammatteo |
|
Name: |
Robert Giammatteo |
|
Title: |
Executive Vice President and Chief Financial Officer |
|
|
(on behalf of the Registrant and as Principal Financial and Accounting Officer) |
45
Source:
FAQ
How did OUTFRONT Media's Q2 2025 revenue compare to Q2 2024?
What caused the sharp decline in OUT's Q2 operating income?
What is OUTFRONT Media's current leverage ratio?
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Is the quarterly dividend secure?
