ARKO Corp. Reports Fourth Quarter and Full Year 2024 Results

RICHMOND, Va., Feb. 26, 2025 (GLOBE NEWSWIRE) -- ARKO Corp. (Nasdaq: ARKO) (“ARKO” or the “Company”), a Fortune 500 company and one of the largest convenience store operators in the United States, today announced financial results for the fourth quarter and the full year ended December 31, 2024. Fourth Quarter and Full Year 2024 Key Highlights (vs. Year-Ago Period)1,2 Net loss for the quarter was $2.3 million compared to net income of $1.1 million. For the year, net income was $20.8 million compared to $34.6 million.Adjusted EBITDA for the quarter was $56.8 million compared to $61.8 million. For the year, Adjusted EBITDA was $248.9 million compared to $276.3 million. Merchandise margin rate for the quarter increased to 33.0% compared to 32.9%. For the year, merchandise margin rate increased to 32.8% compared to 31.8%.Merchandise contribution for the quarter was $134.9 million compared to $146.8 million; more than half of the merchandise contribution decline for the quarter was associated with the Company’s accretive dealerization program. For the year, merchandise contribution was $579.6 million compared to $585.1 million.Retail fuel margin for the quarter was 38.7 cents per gallon compared to 39.2 cents per gallon, resulting from macroeconomically-driven lower fuel prices and reduced price volatility. For the year, retail fuel margin increased to 39.6 cents per gallon compared to 38.8 cents per gallon.Retail fuel contribution for the quarter was $100.2 million compared to $109.3 million. For the year, retail fuel contribution was $428.2 million compared to $435.3 million. Other Key Highlights As part of the Company’s developing transformation plan, the Company converted 153 retail stores to dealer sites during the year ended December 31, 2024, including approximately 100 stores converted in the fourth quarter of 2024. The Company expects to convert a meaningful number of additional stores throughout 2025, including another approximately 100 retail stores by the end of the first quarter of 2025. The stores converted to dealer locations in 2024 are expected to produce an annualized benefit to combined wholesale segment and retail segment operating income of approximately $8.5 million. The Company now expects that, at scale, its channel optimization will yield a cumulative annualized benefit of operating income in excess of $20 million. This channel optimization is also expected to enable the Company to better focus and prioritize future investments in its remaining retail stores.In 2024, the Company expanded its planned pipeline of NTI (new-to-industry) stores to eight, including two stores that opened in 2024 and an additional two stores opened in the first quarter of 2025. The Company expects to open the four remaining NTI locations over the course of 2025.The Board declared a quarterly dividend of $0.03 per share of common stock to be paid on March 21, 2025 to stockholders of record as of March 10, 2025. 1 See Use of Non-GAAP Measures below.2 All figures for fuel costs, fuel contribution and fuel margin per gallon exclude the estimated fixed margin or fixed fee paid to the Company’s wholesale fuel distribution subsidiary, GPM Petroleum LP (“GPMP”) for the cost of fuel (intercompany charges by GPMP). “We navigated a challenging macroeconomic environment in 2024, while advancing the development of our multi-year transformation plan," said Arie Kotler, Chairman, President, and CEO of ARKO. “We made progress with our dealerization program by strategically refining our retail footprint, strengthening merchandising initiatives, and enhancing customer engagement through value-driven promotions for in-store merchandise and, more recently, a more aggressive value offer at the pump. Our focus on operational efficiencies and the dealerization program allowed us to manage through industry-wide headwinds while making strategic investments in high-growth areas, such as food service and other tobacco products to meet evolving customer preferences.” Mr. Kotler continued: “Looking ahead to 2025, we remain committed to driving sustainable long-term growth and value creation for our stakeholders. We plan to strengthen our competitiveness by continuing to invest in higher-growth categories, delivering further value to our customers and further optimizing our store portfolio. We are acutely focused on delivering innovative, value-driven solutions that enhance the customer experience while maximizing profitability and expanding revenue opportunities.” Fourth Quarter and Full Year 2024 Segment Highlights Retail For the Three MonthsEnded December 31, For the YearEnded December 31, 2024 2023 2024 2023 (in thousands) Fuel gallons sold 258,856 279,035 1,080,990 1,122,321 Same store fuel gallons sold decrease (%) 1 (4.4%) (7.5%) (6.1%) (5.3%)Fuel contribution 2$100,212 $109,336 $428,216 $435,322 Fuel margin, cents per gallon 3 38.7 39.2 39.6 38.8 Same store fuel contribution 1,2$96,830 $104,262 $403,503 $422,090 Same store merchandise sales (decrease) increase (%) 1 (4.3%) (2.8%) (5.4%) 0.4%Same store merchandise sales excluding cigarettes (decrease) increase (%) 1 (2.1%) (1.8%) (3.8%) 2.5%Merchandise revenue$408,826 $446,727 $1,767,345 $1,838,001 Merchandise contribution 4$134,873 $146,773 $579,569 $585,122 Merchandise margin 5 33.0% 32.9% 32.8% 31.8%Same store merchandise contribution 1,4$129,376 $135,532 $543,368 $560,321 Same store site operating expenses 1$179,302 $181,527 $736,727 $737,158 1 Same store is a common metric used in the convenience store industry. The Company considers 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. 2 Calculated as fuel revenue less fuel costs; excludes the estimated fixed margin or fixed fee paid to GPMP for the cost of fuel. 3 Calculated as fuel contribution divided by fuel gallons sold. 4 Calculated as merchandise revenue less merchandise costs. 5 Calculated as merchandise contribution divided by merchandise revenue. Merchandise contribution for the fourth quarter of 2024 decreased $11.9 million, or 8.1%, compared to the fourth quarter of 2023, while merchandise margin increased to 33.0% in the fourth quarter of 2024 compared to 32.9% in 2023. The decrease in merchandise contribution was due to a decrease in same store merchandise contribution of $6.2 million and a decrease of $7.7 million related to underperforming retail stores that were closed or converted to dealers, partially offset by an increase in merchandise contribution of $2.0 million from the SpeedyQ acquisition that closed in April 2024. Merchandise contribution at same stores decreased in the fourth quarter of 2024 primarily due to lower contribution from several core destination categories and cigarettes, partially offset by higher contribution from other tobacco products. For the year ended December 31, 2024, merchandise contribution decreased $5.6 million, or 0.9%, compared to the year ended December 31, 2023, while merchandise margin increased to 32.8% in 2024 from 31.8% in 2023. The decrease in merchandise contribution was due to a decrease in same store merchandise contribution of $17.0 million and a decrease in merchandise contribution of $11.6 million related to underperforming retail stores that were closed or converted to dealers, partially offset by incremental merchandise contribution from recent acquisitions of $21.7 million. For the fourth quarter of 2024, retail fuel contribution decreased $9.1 million to $100.2 million compared to the prior year period, with a same store fuel contribution decrease of $7.4 million attributable to gallon demand declines reflecting the challenging macro-economic environment. Fuel margin of 38.7 cents per gallon was down 0.5 cents per gallon compared to the fourth quarter of 2023, resulting from lower fuel costs and reduced price volatility this year. In addition, a decrease in retail fuel contribution of $3.7 million was related to underperforming retail stores that were closed or converted to dealers, partially offset by incremental fuel contribution from the SpeedyQ acquisition of approximately $1.8 million. For the year ended December 31, 2024, fuel contribution decreased $7.1 million, or 1.6%, compared to the year ended December 31, 2023, while fuel margin per gallon increased. Same store fuel margin per gallon for 2024 increased to 39.7 cents per gallon from 39.0 cents per gallon for 2023. Incremental fuel contribution from recent acquisitions of approximately $16.8 million was more than offset by a decrease in same store fuel contribution of $18.6 million. In addition, a decrease in fuel contribution of $6.1 million was related to underperforming retail stores that were closed or converted to dealers compared to 2023. Wholesale For the Three MonthsEnded December 31, For the YearEnded December 31, 2024 2023 2024 2023 (in thousands) Fuel gallons sold – fuel supply locations 201,317 199,861 794,796 801,260 Fuel gallons sold – consignment agent locations 38,563 40,144 154,560 168,005 Fuel contribution 1 – fuel supply locations$12,004 $11,499 $47,930 $48,396 Fuel contribution 1 – consignment agent locations$10,270 $10,101 $42,420 $44,512 Fuel margin, cents per gallon 2 – fuel supply locations 6.0 5.8 6.0 6.0 Fuel margin, cents per gallon 2 – consignment agent locations 26.6 25.2 27.4 26.5 1 Calculated as fuel revenue less fuel costs; excludes the estimated fixed margin or fixed fee paid to GPMP for the cost of fuel. 2 Calculated as fuel contribution divided by fuel gallons sold. Fuel contribution was approximately $22.3 million for the fourth quarter of 2024 compared to $21.6 million for the fourth quarter of 2023. Fuel contribution for the fourth quarter of 2024 at fuel supply locations increased by $0.5 million, and fuel contribution at consignment agent locations increased by $0.2 million, as compared to the prior year period, with fuel margin increases of 0.2 cents per gallon and 1.4 cents per gallon, respectively. For the fourth quarter of 2024, other revenues, net, increased by approximately $1.8 million, while site operating expenses increased by $0.6 million compared to the prior year period, resulting from the retail stores that were converted to dealers. For the year ended December 31, 2024, wholesale operating income increased $0.8 million, compared to 2023. An increase of approximately $3.4 million in other revenues, net, was partially offset by a decrease in fuel contribution of approximately $2.6 million in 2024 compared to 2023. At fuel supply locations, fuel contribution decreased by $0.5 million, and fuel margin per gallon remained consistent with 2023, primarily due to decreased prompt pay discounts related to lower fuel costs and lower volumes at comparable wholesale sites, which was partially offset by incremental contribution from recent acquisitions and the retail stores converted to dealers. At consignment agent locations, fuel contribution decreased $2.1 million while fuel margin per gallon increased for 2024 compared to 2023, primarily due to incremental contribution from recent acquisitions and the retail stores converted to dealers, which was offset by lower rack-to-retail margins and decreased prompt pay discounts related to lower fuel costs. Fleet Fueling For the Three Months Ended December 31, For the Year Ended December 31, 2024 2023 2024 2023 (in thousands) Fuel gallons sold – proprietary cardlock locations 32,888 33,285 136,104 130,995 Fuel gallons sold – third-party cardlock locations 3,239 3,201 12,814 9,832 Fuel contribution 1 – proprietary cardlock locations$15,823 $13,146 $62,612 $54,685 Fuel contribution 1 – third-party cardlock locations$509 $245 $1,677 $1,215 Fuel margin, cents per gallon 2 – proprietary cardlock locations 48.1 39.5 46.0 41.7 Fuel margin, cents per gallon 2 – third-party cardlock locations 15.8 7.6 13.1 12.4 1 Calculated as fuel revenue less fuel costs; excludes the estimated fixed fee paid to GPMP for the cost of fuel. 2 Calculated as fuel contribution divided by fuel gallons sold. For the fourth quarter of 2024, fuel contribution increased by $2.9 million compared to the fourth quarter of 2023. At proprietary cardlocks, fuel contribution increased by $2.7 million, and fuel margin per gallon also increased for the fourth quarter of 2024 compared to the fourth quarter of 2023. At third-party cardlock locations, fuel contribution increased by $0.3 million, and fuel margin per gallon also increased for the fourth quarter of 2024 compared to the fourth quarter of 2023. For the year ended December 31, 2024, fuel contribution increased by $8.4 million compared to the year ended December 31, 2023. At proprietary cardlocks, fuel contribution increased by $7.9 million, and fuel margin per gallon also increased for the year ended December 31, 2024, compared to the year ended December 31, 2023. At third-party cardlock locations, fuel contribution increased $0.5 million, and fuel margin per gallon also increased for 2024 compared to 2023. These changes were primarily due to higher volumes and the cardlocks acquired in the Company’s acquisition of certain sites from WTG Fuels Holdings, LLC in 2023. Site Operating Expenses For the quarter ended December 31, 2024, convenience store operating expenses decreased $13.0 million, or 6.5%, compared to the prior year period primarily due to a decrease of $14.3 million from underperforming retail stores that were closed or converted to dealers and a decrease in same store operating expenses of $2.2 million, or 1.2%. The decrease in convenience store operating expenses was partially offset by incremental expenses related to the SpeedyQ acquisition that closed in April 2024. For the year ended December 31, 2024, convenience store operating expenses increased $11.2 million, or 1.4%, as compared to the year ended December 31, 2023, primarily due to $33.1 million of incremental expenses related to recent acquisitions. The increase in site operating expenses was partially offset by a decrease in same store operating expenses of $0.4 million, and $22.1 million of reduced expenses for underperforming retail stores that were closed or converted to dealers. Liquidity and Capital Expenditures As of December 31, 2024, the Company’s total liquidity was approximately $841 million, consisting of approximately $262 million of cash and cash equivalents and approximately $579 million of availability under lines of credit. Outstanding debt was $881 million, resulting in net debt, excluding lease related financing liabilities, of approximately $619 million. Capital expenditures were $36.1 million, and $113.9 million for the quarter and year ended December 31, 2024, respectively. Quarterly Dividend and Share Repurchase Program The Company’s ability to return cash to its stockholders through its cash dividend program and share repurchase program is consistent with its capital allocation framework and reflects the Company’s confidence in the strength of its cash generation ability and strong financial position. The Board declared a quarterly dividend of $0.03 per share of common stock to be paid on March 21, 2025 to stockholders of record as of March 10, 2025. There was approximately $25.7 million remaining under the share repurchase program as of December 31, 2024. Company-Operated Retail Store Count and Segment Update The following tables present certain information regarding changes in the retail, wholesale and fleet fueling segments for the periods presented: For the Three Months Ended December 31, For the Year Ended December 31, Retail Segment2024 2023 2024 2023 Number of sites at beginning of period 1,491 1,552 1,543 1,404 Acquired sites — — 21 166 Newly opened or reopened sites 1 — 3 4 Company-controlled sites converted to consignment or fuel supply locations, net (102) (3) (153) (16)Sites closed, divested or converted to rentals (1) (6) (25) (15)Number of sites at end of period 1,389 1,543 1,389 1,543 For the Three MonthsEnded December 31, For the YearEnded December 31, Wholesale Segment 12024 2023 2024 2023 Number of sites at beginning of period 1,832 1,825 1,825 1,674 Acquired sites — — — 190 Newly opened or reopened sites 2 9 25 39 83 Consignment or fuel supply locations converted from Company-controlled or fleet fueling sites, net 102 2 153 15 Closed or divested sites (21) (27) (95) (137)Number of sites at end of period 1,922 1,825 1,922 1,825 1 Excludes bulk and spot purchasers. 2 Includes all signed fuel supply agreements irrespective of fuel distribution commencement date. For the Three MonthsEnded December 31, For the YearEnded December 31, Fleet Fueling Segment2024 2023 2024 2023 Number of sites at beginning of period 281 295 298 183 Acquired sites — — — 111 Newly opened or reopened sites — 2 1 6 Fleet fueling locations converted from fuel supply locations, net — 1 — 1 Closed or divested sites (1) — (19) (3)Number of sites at end of period 280 298 280 298 First Quarter and Full Year 2025 Guidance The Company currently expects first quarter 2025 Adjusted EBITDA to range between $27 million and $33 million, with an assumed range of average retail fuel margin from 37.0 to 39.0 cents per gallon. The Company currently expects full year 2025 Adjusted EBITDA to range between $233 million and $253 million, with an assumed range of average retail fuel margin from 39.5 to 41.5 cents per gallon. The Company is not providing guidance on net income at this time due to the volatility of certain required inputs that are not available without unreasonable efforts, including future fair value adjustments associated with its stock price, as well as depreciation and amortization related to its capital allocation as part of its focus on accelerating organic growth. Conference Call and Webcast Details The Company will host a conference call today, February 26, 2025, to discuss these results at 5:00 p.m. Eastern Time. Investors and analysts interested in participating in the live call can dial 877-605-1792 or 201-689-8728. A simultaneous, live webcast will also be available on the Investor Relations section of the Company’s website at https://www.arkocorp.com/news-events/ir-calendar. The webcast will be archived for 30 days. About ARKO Corp. ARKO Corp. (Nasdaq: ARKO) is a Fortune 500 company that owns 100% of GPM Investments, LLC and is one of the largest operators of convenience stores and wholesalers of fuel in the United States. Based in Richmond, VA, our highly recognizable Family of Community Brands offers delicious, prepared foods, beer, snacks, candy, hot and cold beverages, and multiple popular quick serve restaurant brands. We operate in four reportable segments: retail, which includes convenience stores selling merchandise and fuel products to retail customers; wholesale, which supplies fuel to independent dealers and consignment agents; fleet fueling, which includes the operation of proprietary and third-party cardlock locations, and issuance of proprietary fuel cards that provide customers access to a nationwide network of fueling sites; and GPM Petroleum, which sells and supplies fuel to our retail and wholesale sites and charges a fixed fee, primarily to our fleet fueling sites. To learn more about GPM stores, visit: www.gpminvestments.com. To learn more about ARKO, visit: www.arkocorp.com. Forward-Looking Statements This document includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may address, among other things, the Company’s expected financial and operational results and the related assumptions underlying its expected results. These forward-looking statements are distinguished by use of words such as “accretive,” “anticipate,” “aim,” “believe,” “continue,” “could,” “estimate,” “expect,” “guidance,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would” and the negative of these terms, and similar references to future periods. These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to, among other things, changes in economic, business and market conditions; the Company’s ability to maintain the listing of its common stock and warrants on the Nasdaq Stock Market; changes in its strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects and plans; expansion plans and opportunities; changes in the markets in which it competes; changes in applicable laws or regulations, including those relating to environmental matters; market conditions and global and economic factors beyond its control; and the outcome of any known or unknown litigation and regulatory proceedings. Detailed information about these factors and additional important factors can be found in the documents that the Company files with the Securities and Exchange Commission, such as Form 10-K, Form 10-Q and Form 8-K. Forward-looking statements speak only as of the date the statements were made. The Company does not undertake an obligation to update forward-looking information, except to the extent required by applicable law. Use of Non-GAAP Measures The Company discloses 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. The Company believes that this information provides greater comparability regarding its 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”). The Company defines EBITDA as net income 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. The Company uses EBITDA and Adjusted EBITDA for operational and financial decision-making and believe these measures are useful in evaluating its performance because they eliminate certain items that it does not consider indicators of its operating performance. EBITDA and Adjusted EBITDA are also used by many of its investors, securities analysts, and other interested parties in evaluating its operational and financial performance across reporting periods. The Company believes that the presentation of EBITDA and Adjusted EBITDA provides useful information to investors by allowing an understanding of key measures that it uses internally for operational decision-making, budgeting, evaluating acquisition targets, and assessing its operating performance. EBITDA and Adjusted EBITDA are not recognized terms under GAAP and should not be considered as a substitute for net income 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 its results as reported under GAAP. The Company strongly encourages investors to review its financial statements and publicly filed reports in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, same store measures, EBITDA and Adjusted EBITDA, as defined by the Company, may not be comparable to similarly titled measures reported by other companies. It therefore may not be possible to compare the Company’s use of these non-GAAP financial measures with those used by other companies. Company ContactJordan MannARKO Corp.investors@gpminvestments.com Investor ContactSean Mansouri, CFA Elevate IR(720) 330-2829ARKO@elevate-ir.com Consolidated Statements of Operations For the Three Months Ended December 31, For the Year Ended December 31, 2024 2023 2024 2023 (in thousands) Revenues: Fuel revenue$1,556,185 $1,759,216 $6,858,919 $7,464,372 Merchandise revenue 408,826 446,727 1,767,345 1,838,001 Other revenues, net 27,098 27,217 105,698 110,358 Total revenues 1,992,109 2,233,160 8,731,962 9,412,731 Operating expenses: Fuel costs 1,416,234 1,613,230 6,271,696 6,876,084 Merchandise costs 273,953 299,954 1,187,776 1,252,879 Site operating expenses 209,906 222,751 875,272 860,134 General and administrative expenses 39,690 38,102 162,920 165,294 Depreciation and amortization 33,989 32,648 132,414 127,597 Total operating expenses 1,973,772 2,206,685 8,630,078 9,281,988 Other expenses, net 3,962 1,168 7,858 12,729 Operating income 14,375 25,307 94,026 118,014 Interest and other financial income 4,229 2,197 30,591 20,273 Interest and other financial expenses (23,942) (25,099) (97,752) (91,516)(Loss) income before income taxes (5,338) 2,405 26,865 46,771 Income tax benefit (expense) 2,995 (1,317) (6,144) (12,166)Income (loss) from equity investment 45 38 124 (39)Net (loss) income$(2,298) $1,126 $20,845 $34,566 Less: Net income attributable to non-controlling interests — 48 — 197 Net (loss) income attributable to ARKO Corp.$(2,298) $1,078 $20,845 $34,369 Series A redeemable preferred stock dividends (1,445) (1,449) (5,750) (5,750)Net (loss) income attributable to common shareholders$(3,743) $(371) $15,095 $28,619 Net (loss) income per share attributable to common shareholders - basic$(0.03) $(0.00) $0.13 $0.24 Net (loss) income per share attributable to common shareholders - diluted$(0.03) $(0.00) $0.13 $0.24 Weighted average shares outstanding: Basic 115,771 116,638 116,139 118,782 Diluted 115,771 116,638 116,949 119,605 Consolidated Balance Sheets December 31, 2024 December 31, 2023 (in thousands) Assets Current assets: Cash and cash equivalents$261,758 $218,120 Restricted cash 30,650 23,301 Short-term investments 5,330 3,892 Trade receivables, net 95,832 134,735 Inventory 231,225 250,593 Other current assets 97,413 118,472 Total current assets 722,208 749,113 Non-current assets: Property and equipment, net 747,548 742,610 Right-of-use assets under operating leases 1,386,244 1,384,693 Right-of-use assets under financing leases, net 157,999 162,668 Goodwill 299,973 292,173 Intangible assets, net 182,355 214,552 Equity investment 3,009 2,885 Deferred tax asset 67,689 52,293 Other non-current assets 53,633 49,377 Total assets$3,620,658 $3,650,364 Liabilities Current liabilities: Long-term debt, current portion$12,944 $16,792 Accounts payable 190,212 213,657 Other current liabilities 159,239 179,536 Operating leases, current portion 71,580 67,053 Financing leases, current portion 11,515 9,186 Total current liabilities 445,490 486,224 Non-current liabilities: Long-term debt, net 868,055 828,647 Asset retirement obligation 87,375 84,710 Operating leases 1,408,293 1,395,032 Financing leases 211,051 213,032 Other non-current liabilities 223,528 266,602 Total liabilities 3,243,792 3,274,247 Series A redeemable preferred stock 100,000 100,000 Shareholders' equity: Common stock 12 12 Treasury stock (106,123) (74,134)Additional paid-in capital 276,681 245,007 Accumulated other comprehensive income 9,119 9,119 Retained earnings 97,177 96,097 Total shareholders' equity 276,866 276,101 Non-controlling interest — 16 Total equity 276,866 276,117 Total liabilities, redeemable preferred stock and equity$3,620,658 $3,650,364 Consolidated Statements of Cash Flows For the Three MonthsEnded December 31, For the YearEnded December 31, 2024 2023 2024 2023 (in thousands) Cash flows from operating activities: Net (loss) income$(2,298) $1,126 $20,845 $34,566 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization 33,989 32,648 132,414 127,597 Deferred income taxes (9,136) (652) (12,796) (4,680)Loss on disposal of assets and impairment charges 1,661 660 6,798 6,203 Foreign currency (gain) loss (6) (101) 35 29 Gain from issuance of shares as payment of deferred consideration related to business acquisition — — (2,681) — Gain from settlement related to business acquisition — — (6,356) — Amortization of deferred financing costs and debt discount 669 661 2,669 2,518 Amortization of deferred income (4,351) (1,840) (14,477) (8,142)Accretion of asset retirement obligation 661 709 2,532 2,399 Non-cash rent 3,530 3,750 14,335 14,168 Charges to allowance for credit losses 112 244 845 1,265 (Income) loss from equity investment (45) (38) (124) 39 Share-based compensation 4,077 1,777 12,339 15,015 Fair value adjustment of financial assets and liabilities (222) 842 (10,985) (10,785)Other operating activities, net (627) 352 125 2,631 Changes in assets and liabilities: Decrease (increase) in trade receivables 21,946 44,550 38,058 (17,937)Decrease (increase) in inventory 5,262 15,373 22,689 (2,013)(Increase) decrease in other assets (16) (957) 13,893 (29,386)Decrease in accounts payable (18,032) (35,836) (24,169) (6,169)(Decrease) increase in other current liabilities (20,664) (8,002) (2,820) 990 Decrease in asset retirement obligation (634) (69) (917) (23)Increase in non-current liabilities 6,852 2,090 29,606 7,809 Net cash provided by operating activities 22,728 57,287 221,858 136,094 Cash flows from investing activities: Purchase of property and equipment (36,133) (35,561) (113,914) (111,164)Purchase of intangible assets — — — (45)Proceeds from sale of property and equipment 2,196 3,134 53,549 310,240 Business and asset acquisitions, net of cash — 33 (54,549) (494,871)Prepayment for acquisitions — (1,000) — (1,000)Loans to equity investment, net 14 18 56 18 Net cash used in investing activities (33,923) (33,376) (114,858) (296,822)Cash flows from financing activities: Receipt of long-term debt, net — 20,810 47,556 99,643 Repayment of debt (5,794) (5,640) (26,357) (22,157)Principal payments on financing leases (1,360) (1,260) (4,940) (5,497)Early settlement of deferred consideration related to business acquisition — — (17,155) — Proceeds from sale-leaseback — — — 80,397 Payment of Additional Consideration (3,354) (3,505) (3,354) (3,505)Payment of Ares Put Option — — — (9,808)Common stock repurchased — (8,495) (31,989) (33,694)Dividends paid on common stock (3,473) (3,497) (14,015) (14,272)Dividends paid on redeemable preferred stock (1,445) (1,449) (5,750) (5,750)Net cash (used in) provided by financing activities (15,426) (3,036) (56,004) 85,357 Net (decrease) increase in cash and cash equivalents and restricted cash (26,621) 20,875 50,996 (75,371)Effect of exchange rate on cash and cash equivalents and restricted cash 18 106 (9) 23 Cash and cash equivalents and restricted cash, beginning of period 319,011 220,440 241,421 316,769 Cash and cash equivalents and restricted cash, end of period$292,408 $241,421 $292,408 $241,421 Supplemental Disclosure of Non-GAAP Financial Information Reconciliation of EBITDA and Adjusted EBITDA For the Three Months Ended December 31, For the Year Ended December 31, 2024 2023 2024 2023 (in thousands) Net (loss) income$(2,298) $1,126 $20,845 $34,566 Interest and other financing expenses, net 19,713 22,902 67,161 71,243 Income tax (benefit) expense (2,995) 1,317 6,144 12,166 Depreciation and amortization 33,989 32,648 132,414 127,597 EBITDA 48,409 57,993 226,564 245,572 Acquisition and divestiture costs (a) 1,249 1,099 5,168 9,079 Loss on disposal of assets and impairment charges (b) 1,661 660 6,798 6,203 Share-based compensation expense (c) 4,077 1,777 12,339 15,015 (Income) loss from equity investment (d) (45) (38) (124) 39 Fuel and franchise taxes received in arrears (e) — — (1,427) — Adjustment to contingent consideration (f) 978 68 (20) (604)Other (g) 519 230 (438) 956 Adjusted EBITDA$56,848 $61,789 $248,860 $276,260 Additional information Non-cash rent expense (h) 3,530 3,750 14,335 14,168 (a) Eliminates costs incurred that are directly attributable to business acquisitions and divestitures (including conversion of retail stores to dealer sites) and salaries of employees whose primary job function is to execute the Company's acquisition and divestiture strategy and facilitate integration of acquired operations. (b) Eliminates the non-cash loss from the sale or disposal of property and equipment, the loss recognized upon the sale of related leased assets, and impairment charges on property and equipment and right-of-use assets related to closed and non-performing sites. (c) Eliminates non-cash share-based compensation expense related to the equity incentive program in place to incentivize, retain, and motivate employees, certain non-employees and members of the Board. (d) Eliminates the Company's share of (income) loss attributable to its unconsolidated equity investment. (e) Eliminates the receipt of historical fuel and franchise tax amounts for multiple prior periods. (f) Eliminates fair value adjustments to the contingent consideration owed to the seller for the 2020 Empire acquisition. (g) Eliminates other unusual or non-recurring items that the Company does not consider to be meaningful in assessing operating performance. (h) Non-cash rent expense reflects the extent to which GAAP rent expense recognized exceeded (or was less than) cash rent payments. GAAP rent expense varies depending on the terms of the Company's lease portfolio. For newer leases, rent expense recognized typically exceeds cash rent payments, whereas, for more mature leases, rent expense recognized is typically less than cash rent payments. Supplemental Disclosures of Segment Information Retail Segment For the Three Months Ended December 31, For the Year Ended December 31, 2024 2023 2024 2023 (in thousands) Revenues: Fuel revenue$779,352 $913,534 $3,509,935 $3,858,777 Merchandise revenue 408,826 446,727 1,767,345 1,838,001 Other revenues, net 15,768 17,104 65,264 74,406 Total revenues 1,203,946 1,377,365 5,342,544 5,771,184 Operating expenses: Fuel costs 1 679,140 804,198 3,081,719 3,423,455 Merchandise costs 273,953 299,954 1,187,776 1,252,879 Site operating expenses 187,981 200,952 790,645 779,448 Total operating expenses 1,141,074 1,305,104 5,060,140 5,455,782 Operating income$62,872 $72,261 $282,404 $315,402 1 Excludes the estimated fixed margin or fixed fee paid to GPMP for the cost of fuel. The table below shows financial information and certain key metrics of the SpeedyQ acquisition in the Retail Segment for which there is no comparable information for any of the prior periods. For the Three Months Ended December 31, 2024 For the Year Ended December 31, 2024 SpeedyQ 1 (in thousands) Date of Acquisition:April 9, 2024 Revenues: Fuel revenue$11,359 $38,937 Merchandise revenue 6,469 20,719 Other revenues, net 311 809 Total revenues 18,139 60,465 Operating expenses: Fuel costs 2 9,580 33,455 Merchandise costs 4,473 14,709 Site operating expenses 3,373 9,760 Total operating expenses 17,426 57,924 Operating income$713 $2,541 Fuel gallons sold 3,768 11,865 Fuel contribution 3$1,779 $5,482 Merchandise contribution 4$1,996 $6,010 Merchandise margin 5 30.9% 29.0% 1 Acquisition of seven Speedy's 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. Wholesale Segment For the Three Months Ended December 31, For the Year Ended December 31, 2024 2023 2024 2023 (in thousands) Revenues: Fuel revenue$652,016 $700,026 $2,799,869 $3,039,904 Other revenues, net 8,681 6,909 29,140 25,775 Total revenues 660,697 706,935 2,829,009 3,065,679 Operating expenses: Fuel costs 1 629,742 678,426 2,709,519 2,946,996 Site operating expenses 10,997 10,400 39,679 39,703 Total operating expenses 640,739 688,826 2,749,198 2,986,699 Operating income$19,958 $18,109 $79,811 $78,980 1 Excludes the estimated fixed margin or fixed fee paid to GPMP for the cost of fuel. Fleet Fueling Segment For the Three Months Ended December 31, For the Year Ended December 31, 2024 2023 2024 2023 (in thousands) Revenues: Fuel revenue$117,196 $136,801 $515,462 $530,937 Other revenues, net 2,131 2,616 9,135 7,818 Total revenues 119,327 139,417 524,597 538,755 Operating expenses: Fuel costs 1 100,864 123,410 451,173 475,037 Site operating expenses 6,056 6,259 24,917 22,298 Total operating expenses 106,920 129,669 476,090 497,335 Operating income$12,407 $9,748 $48,507 $41,420 1 Excludes the estimated fixed fee paid to GPMP for the cost of fuel.

ARKO Corp. Reports Fourth Quarter and Full Year 2024 Results

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