CAPL CrossAmerica Partners LP

NYSE
$23.60

CrossAmerica Partners LP Q2 F2026 Earnings Call Transcript

Thursday, August 6, 2026

AI Conference Call Analysis

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John Smith
Chief Financial Officer
1.00 times for the trailing 12 months ended June 30th, 2025. During the second quarter of 2026, the partnership paid a distribution of 52.5 cents per unit. Turning to the expense portion of our operations, in total across both segments, we reported operating expenses for the second quarter of 2026 of $55 million, a $2.9 million decrease year over year and our seventh consecutive quarter of declining operating expenses across the organization. Retail segment operating expenses for the second quarter declined $2.1 million or 4% and wholesale segment operating expenses declined by $0.8 million or 11%. In our retail segment, our average segment site count was down approximately 7% year over year. On a same store, store level basis, Operating expenses in our retail segment were down approximately 3% for the second quarter of 2026 compared to the second quarter of 2025. The decline was primarily driven by reduced store level employment costs as we remain focused on efficient staffing in our stores. Returning to our wholesale segment, operating expenses declined by $0.8 million or 11% for the quarter. This decline was driven primarily by the decline in lessee dealer or controlled site count within the segment year over year due to asset sales and to a lesser extent, conversions to our retail class of trade. We reported G&A expenses for the quarter of $6.8 million, a slight increase year over year, primarily driven by higher legal fees and equity compensation expense. We remain focused across the organization on efficient expense management at our locations, as well as at the corporate level, ensuring that we are investing in customer facing areas at our locations that will drive the long-term health and sustainability of our sites and driving operational efficiencies in our above store operations. Moving to the next slide, we spent a total of $7.4 million on capital expenditures during the second quarter. with $2.5 million of that total being growth-related capital expenditures and $4.9 million of that being sustaining capital expenditures. Given our strong results for the first six months of the year, we accelerated some maintenance capital spending this quarter with a continued focus on supporting the resiliency of our sites. Regarding our growth capital spending, We remain focused on our company-operated locations, especially in food-related investments that will contribute to our merchandise sales and margin results. One additional item I wanted to touch on is that we entered into an amendment of our credit facility on July 15th. The amendment, among other things, extends the maturity date from March 31st, 2028 to July 15th, 2031 and removes the SOFR credit spread adjustment. You can find additional details regarding this amendment in our Form 8-K filing filed with the SEC on July 16th. Turning to our balance sheet, the underlying performance of our segments along with asset sale activities that Maura noted in her comments helped us reduce our credit facility balance by approximately $10 million during the quarter. The decrease in our balance combined with our strong results here in 2026 resulted in a decrease in our credit facility defined leverage ratio to 3.57 times compared to 3.65 times as of June 30th, 2025. Our management team remains focused on the cash flow generation profile of our business, utilizing our normal course operations and our targeted real estate optimization efforts to manage our leverage ratio at approximately four times on a credit facility defined basis. A lower average interest rate environment also helped improve our interest expense during the second quarter of 2026. Our cash interest declined from $12.1 million for the second quarter of 2025 to $10.9 million in the second quarter of 2026. Our existing interest rate swap portfolio continues to benefit us as well. at this time about 60% of our current credit facility balance is swapped to a fixed rate of approximately 3.4% blended and our effective interest rate on the total credit facility at the end of the second quarter was 5.5%. In conclusion, the partnership has had a strong first half of 2026 and is positioned for continued success as we move deeper into the year. Our strong results, along with our asset sales, enabled us to reduce our debt by $20 million this year so far, while also positioning our portfolio to generate durable and consistent cash flows into the future. We are looking forward to the back half of the year, maintaining a strong balance sheet and generating value for our unit holders. With that, we will open it up for questions.
Operator
Conference Operator
Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star button followed by the number 1 on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star button followed by the number 2. If you are using a speakerphone, please lift the handset before pressing any keys.
Operator
Conference Operator
One moment please for your first question.
Jane Doe
Director of Investor Relations
Being that we don't have any questions for the moment, thank you everyone for joining us here this morning. Should you have any follow-up questions, please feel free to reach out. Have a great day.
Operator
Conference Operator
Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and please ask that you disconnect your lines. Have a great day.