Murphy USA (MUSA) 21 Jul 202020 Q2 Earnings call transcript

Ladies and gentlemen, thank you for standing by and welcome to the Murphy USA Second Quarter 2020 Earnings Conference Call. At this time all participants are in listen-only mode [Operator instructions]. I would now like to hand the conference over to your speaker today, Christian Pikul. Thank you. Please go ahead.

you. thank Hey, everybody. Good morning, as Executive usual Chief President me and Andrew Officer; are Mindy West, Chief Controller. President Officer; Vice and Donnie and Executive and With Smith, Clyde, Vice Financial President Andrew, from results. financial comments opening some Mindy provide of an will the overview After

open discuss in we’ll be mind during of comments the We that from XXXX. will after this comments Q&A. as defined Securities statements Private Act made the forward-looking will revised some considered our briefly call Q&A call, and to guidance closing the Andrew, up keep portion, Reform including Please the in Litigation of

results such, that differ. given the be that variety assurances be or will actual occur A attained. will that to As projections exist no of these can factors events cause may

factors, update further USA see forward-looking revise forms recent discussion Murphy USA and risk publicly XX-Q, Murphy statements. SEC filings. a to latest or of XX-K, duty the X-K other any no please takes For

also certain measures GAAP. During today’s Accounting Generally provide or performance not call, that conform Principles Accepted to may we do

We non-GAAP the a on these Andrew. on Investors found results part can our measures basis of With that, which the schedules website. turn call have section over as release, reported our GAAP to of the with be I’ll earnings provided press reconcile to

We’ve in April. Thank you, in months be to you have our feedback I hope update and time as released and is investor results this over provided we to financial morning everyone and welcome investors as explained how back from many the business helpful. COVID-XX joining impacted Christian. call since level for transparency Good of certainly positive found fourth us today. the Today's QX received we results

and disclosures, surprise as of to record year. results remainder the expect momentum importantly July sustain QX into our prior the come a performance strong the are maintaining that for we While huge shouldn't given

before underlying evaluation our the it’s drivers trends, going The value Raise not appreciate advantage to also our persistent its performance three at these look seeing part fact discuss for strategic positioned of are position to competitive potential. our an amplified as of this well our capital our existing as the we only the as Bar in balance XXXX, a for based I’ll but we the our give you provide on XXXX, for are does trends fundamentals to are cash also these update drivers. look in narrative. reiterate critical creation attractively underlying priorities, am advantage trends impact commitment these creation the goalposts, long value the of and shareholder our These key term not and and undervalued remainder view. COVID-XX us have an my business market to and model financial fully we allocation Related established of time contest well relative the to clear now of the I provide us overall sustainability established I to were business. such, we guidance will COVID-XX, that outlook of Goalpost been do of when sheet trends light throughout business. sustainable of and appreciating in As would spend fully our take guidance and our to as strong persistence we When conviction The relative we but of said for our as our simply the today had XXXX. to will point of grounded only focusing year, so the not potential we to

relationship equilibrium established margins is demand. and we’ll between trend discuss the industry first new in The the fuel

higher the of or area the at in about set We geography length fuel margin given on quartile any retailor. the cost spoken is breakeven third how have essentially

We margins, margins, to explain to have as industry our sharply. to With the were have increase gradual a equilibrium same cents base new the start it sustain Murphy facilitated with, margins for loss in prices and increase. wide trend The most per both retailors helps the were and in continued already To month-to-date see marginal was higher unit which competitors costs for observed as and the prices, while store years unit the this in several cost for margin doubled the are retailers that by higher point, rising norms early level overall XX%. requirement sharply industry, same lower well which just margin is despite fell marginal less from benefited days the which position. consider in the margins by atypical gallon led an low maintaining to for volume historical to the further crude to easy maintain The July COVID-XX when the that profitability industry weaker of of the margins, volume June USA illustrate outcome. certainly price disproportionately its increase falling May, above

rolling we XXXX beyond, levels to at margins to to day July, over in end around the we in $X.XX yet the near the have retail We resulting yet expect recover the our average, excellence forecasting further well maximize us With COVID-XX this to believe enter dynamics we volume higher, to allow annual and to this to will we retailers volumes marginal June to initiatives pricing same-store XX% the of on of equilibrium. May discussed overall XX% basis investments and least capture due of many As potential. value calls, this our were fuel annual persists year fuel the of where fuel a earned our would actually as higher $X.XX contribution. we these equilibrium we margins in headwind are prior be seven levels in below average recovering in expect gallon the in and Xx recovery per continued periods XXXX, due face over

that observed during our and we trend was how categories was second COVID performed. magnified The merchandise

up destination cigarette quarter a second become we contribution last year. carton already pack trip have impressive offers digit and consumer, single compare for multi put high result against the strongly gains Our and

mid-XX% great range volumes we management explains grown basis averaged pack. in the pre-COVID, sizes best in have enhanced XX% larger by up-selling represent difference paid second on range since per pricing precession, a differentiated and category service, ongoing a on that trips Customers margin available commitment delivered clearly had gains greatest carton benefits we inventory handsomely. high points in in with to of While value focus leveled share sustainable no world have and XXXX. with and as received and this the off XXX our with In and of are in they contribution investments and the fewer coupled loyalty unique class market always these believe capability were SKU why the strategy, which our quarter off

it Murphy to which purchases, which Given to provide nicotine nicotine are in tobacco, to and introducing overlook enhanced in come habits, was categories, showed customers, tobacco been about we from only investments our have be came uplift. merchandise products, contribution are the up proper quarter Of share the that products alternative less easy year. total is versus context, customers traffic $XX category. are more gains pouches, offers better value million have out customers promotional $XX reward as likely other purchasing where accounting fuel Drive delivering since attributable this and cigarettes, had assortment back visual OTP increase, including may business merchandising seeing gained To not old second of our currently margin strengths we vapor pack for cigarette, providing of roughly appealing sizes. uncorrelated prior as larger margin substantial timing go together Like with tobacco in not to Murphy continues role exception our or through reflect our to offering XXX,XXX promotion with added product products eight Without $X.X new managing execution and million focused to levels. that Drive other play to driving was and an but they cigarettes, could increase. new of effective an experienced March at OTP gained enhanced margin USA. their the $X.X now traffic. for customer are The COVID tobacco results insights now question, incremental over in-stock rewards in on we which such million XX SKU redemption greater have leading of with tobacco position, who important Murphy entirely set manufacturer service loyal on to capability participants every higher over X% in represent of X, With million

gains. On non-tobacco showed as you dependent offers the expect, categories few hand our are many a more key might fuel outside but other of

for chain general the During we mask lottery, where saw we sanitizers. stood sales in hand and quarter a growth and up supply the margin merchandise categories and both beer

good sales were sold news where good products, XX%, the more predominantly of we unit lottery, these less is While were they margin margin. lower much a news is with category, the came mid-single specifically digit but up

gladly point when we're dollars Nevertheless the our and of thrilled of and fact, with XX XX to In lottery. average due in sales all-in lower to more was merchandise margins more to unit contribution XX.X% customers. decline unit accept attributable the margin performance growing basis will total

commented margin end the the to we you simple to a before, of some modeling the be day I’ve useful might the purposes, contribution to margin and As at you of metric bank. unit for while take dollars

sales beverages, correlated improving to of out like traffic with the are XXXX, so highly in half second fuel more categories, year these from remaining categories. performance into far along as the expect higher and into July, we and packaged better margin fuel volumes candy we look and For the

much again. the offer heat in are restrictions, not on COVID We our we roller recovery seeing up are to simply our food to related waiting hands obviously but the not grills sitting fresh due

We beverage incremental these larger are the talent new new offer XXXX a square our significant and for across food to on foot dispense and network format. and taking specific opportunities growth evaluate beyond. and represent with and will capabilities, and With opportunity in overhaul existing potential X,XXX focus margin this optimizing our

a model is supports around in in cost terms, allows lesser our model, centers this additional the value prevention seeing and reason we fixed use turn and less most. which to more to they the extent and accordingly everyday the utilities, in position, trend low price we during an environment loss have attractive and need win In lower maintenance, enables business to key third The when primarily ultralow structure. wear even we Further, customer simple customers and cost cost, which our be lower this reflecting us variable competitive, traffic tear. period advantage are and

more Our have expect because commissions merchandise more and pay we sales, to at that selling merchandise and the exactly are given would and what associates, and with motivated people which higher pleased store do. come increased costs, our to commissions and the to means they sales controlling is slightly, those that higher store always cost level they we're it are managers

In that and fact, a and to and commissions I can't enhanced announced managers as customer leaders Halls focused encourage be providing to see Town store of sales, we stay and would our the last team's series our additional week reward they team the virtual quarter incredible in our third in on wait for field I results.

I wrap retailers. not the the are these but cost three discussion would relationship marginal to trends, the these As like for on low I highly and us as rather that independent interrelated, up the for trends, is out player, point

credit turned fuel excluding a USA a our stronger our to negative our in a can which points breakeven over record contribution, a XX and year negative card zero breakeven more basis than merchandise metric year-over-year for still fuel costs. for USA showed and certain sales last Murphy improved metric, slightly this achieving the the basis operating decrease goal expenses we at quarter. meaning for prior points further with corporate Remarkably, quarter, year, Murphy penny had fees margin moving coupled sell which store the year improves quarter, we and breakeven from XX this new For level negative low X.X%

allocation store to increase the break the turn excess of investments opportunities the Mindy. financial earning established even will in through continue to ramp who encouraging this an which update their created additional more stores return in taking to are turn various retailers Even higher by up now by call the Beyond the penny, regular your performance are even more and updated new keeping we fuel priorities margin it marginal prices we enhanced guidance the improve are initiatives, XX-plus our means to XXXX. will on the also with capital economics. our in as cover Mindy our over before I some I new and returns questions. experiencing

$X.XX. some with prices for you Thank everyone. start item. prices was in and standard allocated strategic per second quarter will morning $X ago were I sharply $X during of good the than listening quarter, $X.XX, to $XX year gross, to the million Capital remaining and approximated corporate capital of retail Andrew today. and to lower million gallon allocated Average Thanks off expenditures various $XX maintenance initiatives. gasoline million which retail the million

have first a the our authorization, a As to second time of which X.Xx $XXX to quarter $XXX results, million down to COVID We we XX, $XX.X on as million we $XXX tightened $XXX on our to the the outstanding this with shares At we our result, complete that's X.Xx $XX.X we the $XXX with report million in our by Based half ended million remains and XXXX. in planned X.Xx approximately shares as basis. proceeded XXXX. no $XXX have under the of outstanding very should in previously June up program range diluted quarter capital ratio stated, expected and quarter million and guidance million dropped July or recorded and million leverage bit related delays from million. lenders versus debt which with to be original to have a common strong XXXX repurchase about thanks first to we our

over and cash with on ABL under mentioned the and in $XXX repayment we payment of July In June available total amortization to $X.XXXX release, liquidity as early $XXX billion the reducing million remains we remain loan cash just balance does April our in our and next strong borrowing As million made our base total reduced of $XXX in about the facility, position million that XX term $X.XXX sheet our $XX.X early to debt and undrawn. made billion. debt million which

I on billion at at want we a we to about that the do if looking end $X pace results, will few comments. debt. the So And continue in make year financial

by even a of lot the slight see On operating might prior presented we we far room X.X% the low running our first improvement just of store that showed level in to also versus and challenges drawback uptick organization went eliminate operating COVID-XX. structure, cautioned as the team, a there to quarter call say cost through per in efforts store costs responded even our cost. is I discussed the of the the lean benefits year. a dedicated But $XX,XXX our a isn't of I expenses field fact, so to of

such incur response in costs other second we level of incremental to meaningful at expect Although did expenses Inclusive as correlated as categories half traffic range people some a store closely utilities customer to higher the more in to variable X% shrink guidance, maintenance, cost we of traffic our to within guided and did shown the fixed COVID, saw with customer in as reduction. trend and cost remain X%. costs recovers in our the

We closer are that of the currently midpoint forecasting range. to

how very return and to carry levels, customer liquidity, and an to recovery have remains balance – positive strong and environment economic traffic challenging quickly balance uncertainty cash cash business we remains normal free sheet our through can is we most to foresee. us flow which sufficient even that a significant While the respect balance with will

So back that, turn to with I'll call Andrew. the

metrics. Mindy. close to update I of want with our guidance XXXX Thanks an

come stated back which fuel with view, we discussed withdrew a our do. As when more informed had QX, in update would guidance and volume we we call an we

on decrease XXX.X contributions X% half full guidance of XXX,XXX XXXX store month an store provided range The give mid-point suggests fuel is expected to suggest we of volume gallons, basis. a volume second gallons. billion second APSM lower about new for thousand On As into of about To to the basis APSM per math. in versus half the X.XXX total than release, would provide we volume press reflects close reinstated and insight APS billion or per have our in represent the range month stores. our you a for gallons from the That half which of average get XXX.X X% about half second full year XXX,XXX should of expectations, more total to the year, midpoint some an which little pretty XXXX. XXX,XXX I'll you second that X.XXX a year

have is $X.XX our industry the volumes increase per guidance we it's margin While out we we which and gallon. understand $X.XX and will gallon providing I we to full believe business relates half, second the structural $X.XX investors thinking equilibrium for lower of market of as important between the in of the the per another to higher margins will think tune believe of industry. gotten to enjoy past, Due $X.XX we represents the lead for higher in the to which it volume margins to fuel new to the facing, the year benefit discussed,

are this is play price in levels margin stabilizing in but nearly the environment. now penny seeing a suggest, higher gallon rising than are is pennies has appropriate and which believe July behavior recent the than given right as especially Given dynamics about than in in last we all per year historical coming resulted we down today the forecasting higher the from in five about norms the half I We year quarter, of that two would mentioned, higher margins average. gallon, $XX.XX $X.XX at early competitive second in per second

higher risk. contribution being industry further, helps we which of of revised prior flat on our stabilization take from million margin fuel our step you calculate but result levels financial To million, current decline margins, even insulate also incrementally dollars total roughly economy, the If recognize equal, reopening else of volume all reiterate, or $XXX is the to continued in than a will which are above fuel and course predicated $XXX volume you'll that math more year. guidance

contribution our increasing from $XXX that expect million $XXX million, guidance to $XXX we million to strong largely in merchandise tobacco performance the also to million and year-end a into range to due categories of $XXX are XXXX. through We to the continue

Regarding new going to be stores, organic that stores up growth XX stores. likely of XX guidance provided for and to number is we new new

our to that partners to up our provided. initially a XX to for construction number the However, XX versus chain we likely is maintain and level and activity be accelerated raise we going in rebuild guidance supply load

to as our to million for going Mindy for are projects activity $XXX new of construction impacted are the bit for in the store as release. total by been guidance midpoint with and XXXX. level, that ranges, So a at in-line given COVID, year modeling expected million forecasting XX, not range of we're of the construction activity $XXX has of The our you unchanged a CapEx now mentioned, in EBITDA range remain guidance metrics and we simply million. calibration purposes gets remaining ballpark $XXX these the full Using shown tighten the

will an our sustained believe improvements business sooner This tobacco conducting margin XXXX, analysts at in million view and will demographic. format we customer fuel markets poised and mix of price third and gallon. profile new we and more to with other higher XXXX our broader contract That show stores XX% we volumes $XXX objectives today, As projected expect including, new between levels than of consumer associated that changes party given our sources Further, initiatives average. advantage Data brings raise-the-bar basis now XXXX, from per have EBITDA the our our growth. we come a renegotiations, baseline rural can also XXXX we around dynamic which more analysis million appreciation gains anticipated. In point. return with we the our to performing the where larger from are to better our $X.XX to final industry industry supply all to to that chain $XXX this benefit as XXXX same we than and coupled levels, adding sustainable for or performing XXXX my we US food future are on center improve exceed recover of XX% in forward least did and benefit of to look to geographical core talked mix we to sets merchandise whereas XX% well our as demand achieve EBITDA spend, estimate above at about me to volume investor are conclusively to as segments our reinforce deck offers beverage share improving sustain our whose set

to of repurchases, With two authorized our share loading $XXX our up against XXXX the we early over front in board executed program million with years.

with have we response complete of well our this equally market see the are morning balance nice team on to as ahead It's share are to to positioned then. cash the as beginning deliver value management schedule. investors sheet this and a We program our creation to since view worked

to value, grow deliver Importantly, improvements shareholder we allocate material opportunities organic environment, friendly we manner. have current the program, capital a additional just not for shareholder ramp-up future to as but to in for continue growth and foreseeable the our in business continue the

persistence future for be discussed ours underlying we the potential, While growing that this believe results, flexibility. an has Q&A. quick advantage of reflect powerful today model period, before the have discounted business remains throughout valuation Give this trends our current our reason to no position group. sheet discount investors the COVID. why place the repurchase been let's that Unfortunately, open have at in a we shown lines lever advantage up fundamentals peer disconnect resilient also take may see well and to trade given view yet like XXXX means versus we should COVID with And balance cash a share operator, earnings as we

Instructions]. [Operator

Please from comes Mandeville first with Your Chris ahead. Jefferies. go question

Hey, good morning guys.

Good morning, Chris.

morning. Good

any performance was Andrew, Were to illustrating just maybe provide if evaluated bit of lot type relative the you supercenter around locations? exit the models way of what from footprint these that the were parsing around or and average? reading what a in can start or parking out I nine this they there's hoping type you color of and more found down were they road, the behind I little on just how could know brief you comments the quickly Minnesota.

performance how nine Sure, we investor noted subscale some so would had you a some year together we low performing in it it just is of stores. would stores to lower better We versus kiosk in were in off see and buyer, old we about about that us. many nine support in a might had have news put have super ago Minnesota new also winter. for and built pops employees heater XXX stores. geography as of challenge good that three with the represents and our our evolve, decided We is that the various understand stores; what we you had during when would a over don't stores most all private dealing transitioned I a we we The deck programs Minnesota, in a found at kiosks. a portfolio talked appreciate Walmart as And our The them the of their having where packaging I the through sad that exit. transition. this couple looked part coolers, we it we so soda of explode be factors the of call know we the market,

overall Christian, nine performing average that the business. than We could and stores do the needless were but That's follow-up our haven't those we that metrics across the that say, we out to lower had something numbers. carved for with in state

about average can months. gallons five I was XXX,XXX add also size associated that with for Chris volumes on the the

combined than and and of million. was So the underperforming $X network the less dramatically EBITDA rest the

the be of in or to guidance implied Mindy. helpful I'm going high that more following back that or question you're one of thinking ballpark. expect anything Actually per I case should the currently just less the if maybe per are half year how especially what to XX% of the the be Minnesota year, nine I in in month why would anyway number. my trying light very that me which guess a levels Is about this still in help would Mindy there it’s prior that north now only to of digits. kind it that how single from year would back be that continued thinking referenced be half down in gallons then recovery that, Okay, be won't store level versus decline total actually detract to they for of and square on sales at leads stores, the the of running about

won't X,XXX largely out a needle. capability – Yeah, the data. how move other factors, how in nine at good the at could are cause This experts exceed looking looked some of stores we've lined that and using Look, of number gives from straight our We we've actually variability you data it. just markets a of built mobility sense us stores there. know and recovering a are factors could number, we so other industry certainly that there's in that but

but more about higher volume from means from the industry margin, those that dynamics high we’ll is if equilibrium, I much fuel seeing our margins with wrong equal the either just same contribution or that's error any standpoint. thing and than thinking we’re we're up this know volume given forecast So one the a make or low, be estimate, will way best wrong estimate the at And that time. the is new

it, Got okay.

sites the last for for volume, also And for and the nearly environment. that number year. in quota COVID full of that the was year strongly They performing Minnesota weren't

type capital, here just, guess which Of you so is hop you And question some buyback, final now clearly unit have is okay. a I the to queue priorities, to that of that share of as amount growth, so valuation of market have deploy, accelerate is to and you referenced you so the ago, last month back my Andrew ascribing this course, your or I significant guys into before then yourself asked I what undervalued to. have

if a mean activity I'm in better we annual of with understanding was any about why So I could the quarter in the which current to and respect there an to there's just way buy back think general get trying no practice.

be If annual front-end program will loaded you looking to going a utilize buyback forward. very

that in weighed ending our part conducted we repurchase look, considerations the think for first year. of where program heavily we sit the I now, the board the of terms Yes, in share

I giving and from the gives very as to largely basis In value of will you for we resuming level timing be is you and method terms know preferred on etc., know and stated shortly the provided the our this the the you're our and this opportunities board shareholders. we’ve them to the call modeling meeting earnings and hit But other analysts, continue a our of to those. state, configure front-end expectations of think open window year back

well we capital have that, to as priorities. So our the on deliver means to as do extend that,

excellent few XX deploy Our permitting flex plus and continue NTI on to we basis. for year up capital due a can race pipeline NTI’s lower of is we balance stores rebuilds, some picking shape our and ability to showed our in a between delays and next as

Okay. Take I’ll Congrats care. there. you guys. leave

next Please comes from James. with ahead. Bobby Your question go Raymond Griffin

XX%, the again? a see get go pinched that or volume see Good morning, change place you behavior back everybody. kind your the Thank that. or certain of industry say to, you you'll I more go where what's see in taking look safe. there's margins to staying after back through walk questions. of helpful back incremental kind and industry; the will want I industry everybody’s I do equilibrium XX% taking my that volumes, fuel you at to Andrew, it’s behavior, operators guess know you of they the volume you to hope gets think very back first all for to if oil a about of gets when the normal kind rising comments to When

when Margins it So, always I of the a pinched some we by pinched level, retailers. run when ourselves that and behavior prices normal and think prices we're see you high behavior opportunities rational, I seeing from disciplined some being just but they been low It’s widening fall, price now. still and as higher the think just in see are we know other up, the volume that a are manner. right has done

demand go XXXX, people so saw would to And when XXXX-’XX saw you know, to XXXX, a I especially back sorry, you when encourage you – short. periods, prior

just It behavior but this, underlying higher than happened industry trace of back change. can You margin these a periods at level before. discontinuities higher to margins the like didn't

the have and do course like we've of You the all look, one’s the would gaining think or this capital a that compete away. all environment have it an plenty just risk would says, I all in know motivated But volume. evidence competitors seen more be, earn that capital return we capital, to on for of private public sake we no to whether greatest

help have you to And line besides standard like volumes, anything of kind or you was the know about, big any pretty business volume other in the that's your June, improvement? the just do nice of insight middle of maybe the Okay, at that is uptick better we've kind July? that's notable inflection of big kind the a property of your notably Do trends June and the have in industry in in look that July just a update the you the in notable with you kind regionally of saw maybe talked the volume data there. when of kind any now or – than in kind industry strength versus in us improvement out Is business third helpful. understand why July Walmart it into party where trends the

you factors Yeah. know opening. It's markets economy isolated lot with the of across a

serving. better You markets of recovering higher higher looked level also segment, etc. and party our during sustained that know in say volumes some as markets, keyed urban more lower well, July retail up a July as the XXX for with data recovering Days rural with Xth into codes. at done than latter that pricing income weekend, June of the customer showing our data to we as benefits is would third of also at position zip half spending sharper benefits using typically than mobility lot we got saw and demographic that well. We've that show I analysis are those more have more summer, and actually customer and we’re I've from we a income

that team uncertainty the me, cash about you help environment Andrew the the plus what is just a decision, in, you that balance comfortable you a board understanding plus the for Okay, buyback of on board starts look potential liquidity when of know excellent! there ultimately on you think is liquidity, quickly and I guess at the in share and stuff, and guess And I kind the managing to meet lastly management but we’re if level business at ADL certain that liquidity potential would the available could with there's of us business to know be number? feel excess the then

haven't to Yeah, do that we that prepared disclosed not know right number; you now.

through. and your did proof and of industry how you industry gains seen, the is was cost during this it just this, a seen in back of never step benefit, the just hindsight, team that business fundamental and period. demand something economics related And my we well You there's what's never border going of a to just certainly reality period? look, had out when at never points type, say, play flow how the this destruction I'd structure and I look that, think the earnings drives with the think and ultra-low retailer it's COVID of this had are like seen, what I margins, view know number in to this coupled

you’d if question a higher. the so number mist I this, in asked have would And me said of that

conservative, $XXX now of what stronger prove in that equilibrium increase, season out million say, we this given we're structural cash. to leverage this you know of think nearly ABL, and margins, to just undrawn strong I us, what remain continues see going seen front X.Xx but and we demand we’ve the

I’ll our it We’re lot; in position against leave just at very to a that. allocate priorities. good It’s capital strategic a very,

half luck Okay, that's on of in and second the an quarter helpful. best Congrats XXXX. excellent of again

you. Thank

Ben Please ahead. comes Bienvenu Stephens. Your go next question with from

Hi Ben. is everyone. Pooran This for a on

Good morning.

just want wanted couple I I morning. just to of ask ask – questions. a to good

strong, see just could margins. want quite Tobacco non-tobacco a was I First, but you bit. on to merchandise elaborate if we down quite noticed

mix sites sites thinking store Just improved in those wondering And you a has or And of then about and you housekeeping each just at number allowed the impacting I are buckets. then the have you the quick the how two, question pandemic. to within of end. your in pipeline COVID of COVID those light have is increase the quality of

Okay.

margin XX so because a sales was were it’s that you we the last that. So the activity you so lot just decline said by and the promotional we associated to dollars this way mid-single know had a mix were due of was program as just of impact incremental X.X%, the know already points down, The with nationally no out due there unit there's and just draw contribution low but Murphy year. up and remaining time five of margin since digit rolled awards margin, basis it’s unit drove lottery, points

volume that know with So volume. as the sustained you coupled lottery, with candy improve to high are items are the dollars beverage beverage and general correlated continuing packaged know that lower explain so contribution the gains those beer to we see and food with merchandise, you dispensed be and weaker largely volume, higher and areas and strong due

our to this new-to-industry geographies target housekeeping and certainly that and the the of take of seeing that, know estate third the do You work And not could extent our and developers opportunity. side, so for powder real target to on we're positioned we team advantage a we're take have in your real but that seek estate question. back a and the high parties that we markets, to distressed in of you accelerate we lot then of of real and out estate level with locations point advantage pipeline us with yet at would dry where well we're there, to

Okay.

think this debt, Mindy. was were total you Now, the $X one’s for that speaking, debt, I billion correct? When

That's correct.

Okay.

that That’s outstanding balance from our term the our goods on loan what is includes. and

drawn the facility. have under nothing We ABL

for then that, queue. jump I'll you Thank back and the Awesome! in

ahead. with [Operator question from Casella Instructions] Carla JP comes Your next Morgan. Please go

questions. more taking and include any and it's impact with is any wondering do service does subscription its I going on – on those? discounts, about you expanding to your for or you them if see and you Walmart this gas hear thank the of that partner of Hi, some talking I'm business

would have would number know we know stores natural entertain is one not stores a be just You for opportunity, know, combination something certainly can that that we you at of that and they think more the have much so on number of say you this that I and that that given would time. the

Okay, a you is when of typically them, threat in parting your any region? a are does that you're do stores with it cause but for competitive and not that, where you

not those more opportunities in a like because just on each there's neighborhood or within I lot in, would a mile half What many in where to So stores if we’re other. something and markets markets. like that locations of a we say you just go just think we’re where about the collaborate we’re program that of a versus markets head-to-head, to addition capacity it’s a mile adding is where

see So a a only it if get To so XXX one would back kind would you in also network. to be there one program advantage application have step to of get. broader think of and or that that, of would uplift the full get there’s the their stores like

you. Thank great. Okay,

Tom [ph]. Elliott from go next question comes Your Please ahead.

Good afternoon.

Before I okay? just me proceed, can you hear that can I check

hear can you. we Yes,

me. Fantastic! from Two questions

provide at in the that gallon did you the how develop did quarter, that just turn if color can to you then a out i.e., highlighted monthly some ask cent on I the of Firstly, throughout around to you basis, could out through think then wanted just start of And your to it hang quarter? call, you how if question. year, terms the rest even you for first was just can in I that's well on about my simpler the could you wondering us, the perhaps lay margins the how

Sure.

prices basis, and then that, So the know May and know $X.XX, on May $X.XX rising and June in it it margin significantly. know saw for we was you was you a had June top you product in was wholesale that retail north led supply margin we in April $X.XX our and gallon cents on of of $X.XX per as to

seeing So $X.XX contribution $X.XXX fees. a were we PS&W to from the

back steeply seeing are mean I a $X.XX, all getting it unit variable of do volume were that, maintain enables cost retailers that. some this the persists? the higher price annual to price that simple profitability, a experiencing the this that in or and industry, $X.XX Why them So yet higher believe rising customers. would environment of laws cost, gets their That price That’s and setting as being that to by lowest $X.XX created me know would the to require margins average the we you is and rising during of twice And that in, higher excess right. from point. industry your margin the is know lowest low cost capture offering through Normally prices if thing our in consumers, demand. margins everyday say in you to to structure down price environment. that, If amongst even fixed, you my passed period we know at know within you're the this we just recovery, see retailers operates you saw we expect also that. $X.XX the economic to to in I you a I supply to you know to think weaker the other as same differential business

if was and dynamic have commodity margin I place, fell this another rate all So has, is passing we’re on that had think to they this industry high prices so even prices higher held up and were that’s prices consumers lower than if just they lower day would taking every change. demand environment at a and falling, as

of fundamentals I those our a curve. industry, it supply structural, think I know two call steep its you so And

prices industry ultra-low players the side, know price. weaker day. I display signs we one with has another ability to through side which pass on massive the the all coupled every other that have these players that We and do don't

works. that level industry transparency, the way the with just So of that's

just payables. very on a huge to a that's it’s guys, better sense, especially know working you but I second on get I wanted question you, Thank capital. for My is driver helpful.

really get able your you how the end Are quarter? press payables, split the XX-Qs of correct to and think, for sense your just that trade quarter. out a wanted working this payables wrong. second I I I’m didn't over the please but In split out capital split I of the liabilities, in release. to me of you if has accrued moved see that

lowered. can and capital the point a the quarter a in tell is measurement, detail No, what due the sheet product quarter during primarily Christian up sales from but follow bounces is predominantly volumes, balance very was course prices, more with Tuesday you ends. lower around quarter a it I quarter same and quarter way so you the prices. and the and volumes payable time result due that then working depends course large bit also it to most is was working lower of receivable our Friday. timing But of accumulation quite of was that's accounts affected and of could around ends a Accounts does have day because end, balances by the can and of payables, on a the cash versus the of the different in is what moved just thing capital if when to very the That

that. I appreciate

on you follow-up trade any with other detailed And questions versus can Christian others. accounts regarding

Okay, that. I appreciate

then last the And on and question working of you just on in back one sort comment to of half back the any what one just capital. guess year? directionality I Just in queue. just Are able for the you’re I’ll expecting more provide

that inventory commensurate it incur rise, grows we would growing increase that we and replaced but with prices well. in prices sites ABL capital, our then why at also Well, as would our because facility, working like that’s as

in product grows tandem with liquidity increasing. Our prices

at this questions further no are There time.

on wanted I on Great! that One was point to to related who Ben. for Pooran’s pass question that

recovery June of at make think just non-tobacco categories, was know address you QX on point some that about XX.X%, to X.X%. your the there. that those sure so grew grew APSM margin of wanted I gross so at helps think question Our I

level stay Thanks face that forward So, in and Bye. value for same the there doing throughout our us of the adversity, COVID of all everyone and to opportunity we'll of look deliver everyone we've transparency our been the share to the customers recovery. safe. to providing results. thanks and for giving keeping, to sorts the continues that today great joining team call out Thanks our

call. This you. concludes today's Thank conference

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