- Third Quarter 2016 Net Income of $260
million, or $3.41 per diluted share compared to the Third Quarter
2015 Net Income of $85 million or $1.12 per diluted share.
Excluding certain items discussed below from the Third Quarter of
2016 and the gain from the Company's sale of its California and
Wyoming convenience stores, earnings per diluted share was $0.51
compared to earnings per diluted share of $1.12 for the same period
of 2015
- Compared to Third Quarter 2015, U.S.
Merchandise & Services Gross Profits grew 19% and Canadian
Merchandise & Services Gross Profits grew 5%
- Opened 13 new stores during the Third
Quarter 2016 and a total of 29 stores year-to-date
CST Brands, Inc. (NYSE: CST), one of the largest independent
retailers of motor fuels and convenience merchandise in North
America, today reported financial results for the third quarter
ended September 30, 2016.
Kim Lubel, Chairman and CEO of CST Brands, said, “We performed
well during the quarter despite the comparison with a very strong
fuel margin in the third quarter 2015. Our U.S. business grew
merchandise and services gross profit 19% on increased sales and
margins, while our Canadian stores grew merchandise and services
gross profits 5% with a 3% improvement in same store sales. We also
continued to execute on our organic growth plans with the addition
of thirteen new-to-industry stores during the quarter and 29 stores
year-to-date." Lubel added, "We continue to work toward completing
our merger with Circle K and we currently anticipate closing on the
transaction in early 2017."
Third Quarter Results
For the three month period ended September 30, 2016, the
Company reported net income of $260 million, or $3.41 per diluted
share compared to net income of $85 million, or $1.12 per diluted
share, for the same period in 2015. This improvement in net income
was driven by a gain on the sale of assets and an increase in both
the U.S. and Canadian merchandise and services gross profit during
the quarter. For the three month period ended September 30,
2016, included in net income are certain special items consisting
of a gain from the Company's sale of its California and Wyoming
convenience stores, offset by certain acquisition expenses,
merger-related expenses, legal expenses and professional fees
totaling approximately $221 million, net of tax, or $2.90 per
share. Excluding these special items, net income would have been
$39 million, or $0.51 per diluted share, for the three month period
ended September 30, 2016. There were no such special items in the
2015 period.
EBITDA was $461 million for the three month period ended
September 30, 2016 compared to $174 million for the same
period in 2015, or a 165% increase. The increase in EBITDA was due
primarily to a $347 million gain on the sale of the Company's
California and Wyoming convenience stores during the quarter
(Non-GAAP measures, including adjusted net income, adjusted
earnings per share and EBITDA, as described, are reconciled to the
corresponding GAAP measures in the Supplemental Disclosure section
of this release).
U.S. merchandise and services gross profit increased 19% when
compared to the third quarter of 2015, primarily driven by an
overall increase in merchandise and services sales and gross
profits in the Company's U.S. core and New-to-Industry (“NTI”)
store sales, aided by acquisition and organic growth, including the
Company’s acquisition of the Flash Foods stores. Same store
merchandise and services sales per store per day declined 3% during
the third quarter of 2016, primarily due to softness in parts of
South Texas caused by a decrease in economic activity in the energy
related sector.
Motor fuel gross profit in the U.S. for the third quarter of
2016 was $95 million versus $150 million in the same quarter of
2015. The decline in motor fuel gross profit was primarily
attributable to a decline in motor fuel gross profit, net per
gallon ("cents per gallon" or "CPG"), which was partially offset by
a 13% increase in motor fuel gallons sold, due to the Company's
expanded core network, which includes Flash Foods. Crude oil prices
were more volatile during the third quarter of 2015 than the third
quarter of 2016, as the daily spot price of West Texas Intermediate
crude oil decreased approximately 20% during the third quarter of
2015 compared to approximately 3% during the third quarter of
2016.
In Canada, motor fuel gross profit increased 3% and merchandise
and services gross profit increased 5% when compared to the third
quarter of 2015, primarily driven by an increase in volume of motor
fuel sold along with an improvement in merchandise and services
sales driven by an increase in the average number of retail sites.
On a same-store basis, merchandise and services sales per site per
day increased 3% in Canada when compared to the third quarter of
2015, primarily due to growth in the grocery and packaged beverage
business.
Nine Months Results
For the nine month period ended September 30, 2016, the Company
reported net income of $306 million, diluted earnings per common
share of $4.02 and EBITDA of $638 million. For the nine month
period ended September 30, 2015, the Company reported net income of
$124 million, diluted earnings per common share of $1.61 and EBITDA
of $320 million. The 99% growth in year-to-date EBITDA in 2016 over
2015 was driven by a gain on the sale of the Company's California
and Wyoming convenience stores during the third quarter and by
continued improvement in the Company's merchandise and services
gross profits (Non-GAAP measures, including EBITDA, are described
and are reconciled to the corresponding GAAP measures in the
Supplemental Disclosure section of this release).
Liquidity and Capital
Resources
For the nine months ended September 30, 2016, cash flow
provided by operating activities totaled $250 million. Cash flow
used in investing activities was $308 million, primarily related to
capital expenditures and the Flash Foods acquisition. Total capital
expenditures, excluding acquisitions, for the nine months ended
September 30, 2016 and 2015 were $239 million and $203
million, respectively. Cash flow used in financing activities was
$65 million, including net payments on CST Brands' revolving credit
facility of $10 million, dividends paid of $15 million and payments
of $50 million on CST Brands' term loan. The effect of foreign
currency exchange rates was a decrease in cash of $1 million.
Overall, cash decreased by $124 million. Cash, as of
September 30, 2016, was $189 million.
As of November 4, 2016, approximately $349 million was
available for future borrowings under CST Brands' revolving credit
facility.
Basis of Presentation
The CST Brands Statements of Income are presented on a
consolidated basis; however, the amounts presented account for
CST’s investment in CrossAmerica under the equity method of
accounting. CrossAmerica is a consolidated variable interest
entity; however, management reviews the results of operations of
CrossAmerica under the equity method of accounting because of CST’s
limited ownership interest of CrossAmerica’s outstanding units. Net
income and earnings per share attributable to CST are unchanged
under the equity method of accounting from consolidating
CrossAmerica. CST’s operating segments on the following pages are
presented before intercompany eliminations with CrossAmerica.
Therefore, the U.S. Retail segment includes in cost of sales the
wholesale fuel costs for sites supplied by CrossAmerica and
operating expenses include rent from sites leased from
CrossAmerica. Consolidated financial statements that include
CrossAmerica are provided in CST Brands’ September 30, 2016 Form
10-Q.
Withdrawal of Guidance and Conference
Call
As previously reported, on August 21, 2016, CST Brands entered
into an Agreement and Plan of Merger with Circle K Stores Inc., a
Texas corporation (“Circle K”). Under the terms of the merger
agreement, CST will be merged with a subsidiary of Circle K. Circle
K is a wholly owned subsidiary of Alimentation Couche-Tard Inc. On
October 11, 2016, CST filed a proxy statement in connection with a
special meeting of its stockholders for such stockholders to
consider adoption of the merger agreement. The special meeting is
scheduled to be held on November 16, 2016.
In light of the pending merger, CST will not be issuing
financial guidance regarding the Company's projected financial
performance and will not be hosting a third quarter earnings
conference call.
CST BRANDS, INC.
CONSOLIDATED STATEMENTS OF
INCOME(a)
(Millions of Dollars, Except per Share Amounts)
(Unaudited) Three Months Ended
Nine Months Ended September 30,
September 30, 2016
2015 2016
2015 Operating revenues $ 2,466 $ 2,506 $ 7,018 $
7,268 Cost of sales 2,115 2,128
6,038 6,344 Gross profit 351
378 980 924 Operating
expenses: Operating expenses 204 176 599 516 General and
administrative expenses 35 31 106 101 Depreciation, amortization
and accretion expense 44 34 128
100 Total operating expenses 283
241 833 717 Gain on the
sale of assets, net 350 — 351
7 Operating income 418 137 498 214 Other
income, net — 2 15 6 Interest expense (11 ) (10 ) (34 ) (30 )
Equity in earnings (loss) of CrossAmerica (1 ) 1
(3 ) — Income before income tax expense
406 130 476 190 Income tax expense 146 45
170 66 Net income $ 260 $
85 $ 306 $ 124
Earnings per common
share Basic earnings per common share $ 3.42 $ 1.12 $ 4.03 $
1.61 Weighted-average common shares outstanding (in thousands)
75,684 75,565 75,603 76,384
Earnings per common share - assuming
dilution Diluted earnings per common share $ 3.41 $ 1.12 $ 4.02
$ 1.61 Weighted-average common shares outstanding - assuming
dilution (in thousands) 76,221 75,903 76,053 76,724
Dividends declared per common share $ — $ 0.0625 $ 0.1250 $ 0.1875
(a)
The CST Brands, Inc. Statements of Income
are presented on a consolidated basis; however, the amounts
presented in the table above account for CST’s investment in
CrossAmerica under the equity method of accounting. CrossAmerica is
a consolidated variable interest entity; however, management
reviews the results of operations of CrossAmerica under the equity
method of accounting because of CST’s limited ownership interest of
CrossAmerica’s outstanding units. Net income and earnings per share
attributable to CST are unchanged under the equity method of
accounting from consolidating CrossAmerica. CST’s operating
segments on the following pages are presented before intercompany
eliminations with CrossAmerica. Therefore, the U.S. Retail segment
includes in cost of sales the wholesale fuel costs for sites
supplied by CrossAmerica and operating expenses include rent from
sites leased from CrossAmerica.
Segment Results
U.S. Retail
The following tables highlight the results of operations and
certain operating metrics of the Company’s U.S. Retail segment
(millions of dollars, except number of convenience stores, per site
per day and per gallon amounts):
Three Months Ended Nine
Months Ended September 30, September 30,
2016 2015
2016 2015
Operating revenues: Motor fuel $ 1,162 $ 1,236 $ 3,341 $
3,499 Merchandise and services(a) 474 404 1,361 1,140 Other(b)
1 1 2 2
Total operating revenues $ 1,637 $ 1,641 $ 4,704
$ 4,641
Gross profit:
Motor fuel–before amounts attributable to
CrossAmerica
$ 99 $ 155 $ 258 $ 282
Motor fuel–amounts attributable to
CrossAmerica
(4 ) (5 ) (15 ) (10 )
Motor fuel–after amounts attributable to
CrossAmerica
95 150 243 272 Merchandise and services(a) 160 135 461 374 Other(b)
1 1 2 2
Total gross profit 256 286 706
648 Operating expenses: Operating expenses 151
125 439 356 Depreciation, amortization and accretion expense
34 25 98 72 Total
operating expenses 185 150 537
428 Gain on sale of assets, net 347
— 347 7 Operating
income $ 418 $ 136 $ 516 $ 227
Core store operating statistics:(c) End of period
core stores 1,154 1,027 1,154 1,027 Motor fuel sales (gallons per
store per day) 5,150 5,226 5,156 5,150 Motor fuel sales (per store
per day) $ 10,661 $ 13,053 $ 10,271 $ 12,435
Motor fuel gross profit per gallon, net of
credit card fees
$ 0.178 $ 0.314 $ 0.155 $ 0.195
CST Fuel Supply wholesale profit
attributable to CrossAmerica(e)
(0.009 ) (0.009 ) (0.009 ) (0.005 )
Motor fuel gross profit per gallon, net of
credit card fees(d), (e)
$ 0.169 $ 0.305 $ 0.146 $ 0.190
Merchandise and services sales (per store per day)(a) $ 4,364 $
4,294 $ 4,180 $ 4,013
Merchandise and services gross profit
percentage, net of credit card fees(a)
33.7 % 33.4 % 33.9 % 32.9 %
U.S. Retail (continued) Three Months Ended Nine
Months Ended September 30, September 30,
2016 2015
2016 2015
Company-operated retail stores: Beginning of period 1,225
1,025 1,049 1,021 NTIs opened 9 3 22 9 Acquisitions — — 165 22
Closed or divested (80 ) (1 ) (82 ) (25
) End of period 1,154 1,027 1,154 1,027 End of period non-core
retail stores — — —
— End of period core retail stores 1,154
1,027 1,154 1,027
Core store same-store
information(c),(f): Company-operated retail
stores(g) 939 939 933 933 NTIs included in core same-store
information(f) 82 82 76 76 Motor fuel sales (gallons per store per
day) 5,074 5,142 5,016 5,033
Merchandise and services sales (per store
per day)(a)
$ 4,329 $ 4,457 $ 4,199 $ 4,228
Merchandise and services gross profit
percent, net of credit card fees(a)
34.0 % 33.4 % 34.0 % 32.9 % Merchandise and services sales, ex.
cigarettes (per store per day)(a) $ 3,225 $ 3,303 $ 3,106 $ 3,106
Merchandise and services gross profit
percent, net of credit card fees and ex. cigarettes(a)
39.9 % 39.5 % 40.0 % 39.0 % Merchandise and services gross profit
dollars(a) $ 127 $ 129 $ 365 $ 354
Notes to U.S. Retail Segment
Results
(a) Includes the results from car wash sales and commissions
from lottery, money orders, air/water/vacuum services, video and
game rentals and ATM fees. (b) Primarily consists of rental income.
(c) Represents the portfolio of core retail stores and excludes
recently acquired retail stores that are being integrated or are
under performance evaluation to determine if they are: (a) to be
fully integrated into the existing core retail operations of CST,
(b) to be converted into a dealer, or (c) other strategic
alternatives, including divestiture or longer term operation by
CrossAmerica. All NTIs are core stores and accordingly are included
in the core system operating statistics. For the period of February
1 to March 31, 2016, Flash Foods stores were classified as
non-core. Effective April 1, 2016, the Flash Foods stores are
included in the U.S. Retail Segment’s core-store operations.
Accordingly, their operations are excluded from the core system
operating statistics for a portion of the nine-month period ended
September 30, 2016, but are included in full for the three months
ended September 30, 2016. (d) Includes $0.05 per gallon of
wholesale fuel distribution profit. (e) CrossAmerica owns a 17.5%
limited partner equity interest in CST Fuel Supply, which is the
sole owner of CST Marketing & Supply, which distributes motor
fuel to the company's retail operations at a net $0.05 per gallon
margin. A separate entity, Fuel South LLC, distributes motor fuel
to the Flash Foods retail operations. (f) The same-store
information consists of aggregated individual store results for all
stores in operation substantially throughout both periods
presented. Stores that were temporarily closed for a brief period
of time during the periods being compared remain in the same-store
sales comparison. If a store is replaced, either at the same
location or relocated to a new location, it is removed from the
comparison until the new store has been in operation for
substantially all of the periods being compared. NTIs are included
in the core same-store metrics when they meet this criteria. (g)
Includes 7 retail sites that do not sell motor fuel, which were
acquired in the Nice N Easy acquisition.
Canadian Retail
The following tables highlight the results of operations and
certain operating metrics of the Canadian Retail segment (millions
of U.S. dollars, except number of retail sites, per site per day
and per gallon amounts):
Three Months Ended Nine
Months Ended September 30, September 30,
2016 2015
2016 2015
Operating revenues: Motor fuel $ 684 $ 734 $ 1,881 $ 2,178
Merchandise and services(a) 75 70 202 194 Other(b) 70
61 231 255 Total
operating revenues $ 829 $ 865 $ 2,314 $ 2,627
Gross profit: Motor fuel $ 63 $ 61 $ 169 $ 170
Merchandise and services(a) 22 21 63 61 Other(b) 10
10 42 45 Total gross
profit 95 92 274
276 Operating expenses: Operating expenses 53 51 160 160
Depreciation, amortization and accretion expense 10
9 30 28 Total operating
expenses 63 60 190
188 Gain on sale of assets, net 3 —
4 — Operating income $ 35
$ 32 $ 88 $ 88
Total retail sites
(end of period): Company-operated (fuel and merchandise) 309
291 309 291 Commission agents and dealers (fuel only) 498 497 498
497 Cardlock (fuel only) 72 72
72 72 Total retail sites (end of period)
879 860 879 860
Average retail sites during the period:
Company-operated (fuel and merchandise) 307 292 306 293 Commission
agents and dealers (fuel only) 496 496 495 495 Cardlock (fuel only)
72 72 72 72
Average retail sites during the period 875 860
873 860
Total system
operating statistics: Motor fuel sales (gallons per site per
day) 3,355 3,270 3,171 3,188 Motor fuel sales (per site per day) $
8,508 $ 9,273 $ 7,865 $ 9,279
Motor fuel gross profit per gallon, net of
credit card fees
$ 0.231 $ 0.237 $ 0.222 $ 0.227
Company-operated retail
site statistics: Merchandise and services sales (per site per
day)(a) $ 2,630 $ 2,603 $ 2,405 $ 2,425
Merchandise and services gross profit
percentage, net credit card fees(a)
30.3 % 30.4 % 31.4 % 31.6 %
Canadian Retail (continued) Three Months Ended
Nine Months Ended September 30, September 30,
Company-operated statistics(c) 2016
2015 2016
2015 Retail sites:
Beginning of period 305 292 303 293 NTIs opened 4 — 7 2
Acquisitions — — — — Conversions, net(d) — — 1 — Closed or divested
— (1 ) (2 ) (4 ) End of period
309 291 309 291
Average foreign exchange rate for $1 CAD to
USD 0.76390 0.76373 0.75711 0.79413
Same store
information ($ amounts in CAD):(e),(f) Company-operated
retail sites 288 288 287 287 NTIs included in same store
information 35 35 34 34 Motor fuel sales (gallons per site per day)
3,517 3,478 3,395 3,415 Merchandise and services sales (per site
per day)(a) $ 3,488 $ 3,387 $ 3,218 $ 3,087
Merchandise and services gross profit
percent, net of credit card fees(a)
30.3 % 30.8 % 31.5 % 31.6 % Merchandise and services sales, ex.
cigarettes (per site per day)(a) $ 1,890 $ 1,840 $ 1,742 $ 1,690
Merchandise and services gross profit
percent, net of credit card fees and ex. cigarettes(a)
42.4 % 42.3 % 43.5 % 43.3 % Merchandise and services gross profit
dollars(a) $ 28 $ 28 $ 80 $ 76
Commission agent and
dealer statistics(c) Retail sites: Beginning of
period 496 495 494 495 New dealers 5 3 12 6 Conversions, net(d) — —
(1 ) — Closed or de-branded (3 ) (1 ) (7 )
(4 ) End of period 498 497
498 497
Same Site
Information(f): Commission agent and dealer
retail sites 467 467 464 464 Motor fuel sales (gallons per site per
day) 2,921 2,897 2,691 2,729
Notes to Canadian Retail Segment
Results
(a) Includes the results from car wash sales, commissions
from lottery and ATM fees. (b) Primarily consists of the business
and home energy operations. (c) Company-operated retail stores sell
motor fuel and merchandise. The company sells only motor fuel at
commission agent and dealer sites. We do not currently distinguish
between core and non-core stores in the Canadian Retail segment.
All sites in the Canadian Retail segment are core stores. (d)
Conversions represent stores that have changed their classification
from commission agents to company-owned and operated or vice versa.
Changes in classification result when we either take over the
operations of commission agents or convert an existing
company-owned and operated store to commission agents. (e) All
amounts presented are stated in Canadian dollars to remove the
impact of foreign exchange and all fuel information excludes
amounts related to cardlock operations. (f) The same-store and
same-site information consists of aggregated individual store
results for all sites in operation substantially throughout both
periods presented. Stores that were temporarily closed for a brief
period of time during the periods being compared remain in the
same-store sales comparison. If a store is replaced, either at the
same location or relocated to a new location, it is removed from
the comparison until the new store has been in operation for
substantially all of the periods being compared. NTIs are included
in the same-store metrics when they meet this criteria.
Supplemental Disclosure Regarding Non-GAAP Financial
Information
EBITDA is a non-U.S. GAAP financial measure that represents net
income before income taxes, interest expense and depreciation,
amortization and accretion expense. EBITDAR is a non-U.S. GAAP
financial measure that further adjusts EBITDA by excluding minimum
rent expense. Adjusted net income and adjusted earnings per share
remove certain discrete items from the U.S. GAAP calculation that
did not occur during both periods being compared. The Company
believes that EBITDA, EBITDAR, adjusted net income and adjusted
earnings per share are useful to investors and creditors in
evaluating its operating performance because (a) they facilitate
management’s ability to measure the operating performance of the
Company's business on a consistent basis by excluding the impact of
items not directly resulting from its retail operations and certain
discrete items that did not occur in bother periods being compared;
and (b) securities analysts and other interested parties use such
calculations as a measure of financial performance. EBITDA,
EBITDAR, adjusted net income and adjusted diluted earnings per
share do not purport to be alternatives to net income and diluted
earnings per share as a measure of operating performance or to cash
flows from operating activities as a measure of liquidity. EBITDA,
EBITDAR, adjusted net income and adjusted diluted earnings per
share have limitations as analytical tools and should not be
considered in isolation or as a substitute for analysis of the
Company’s results of operations as reported under U.S. GAAP.
The following table presents a reconciliation of CST’s net
income to EBITDA and EBITDAR for the three and nine months ended
September 30, 2016 and 2015 and adjusted net income and
adjusted diluted earnings per common share for the three months
ended September 30, 2016 and 2015 (in millions except per
share data or as otherwise noted):
Three Months Ended Nine
Months Ended September 30, September 30,
2016 2015 2016
2015 EBITDA and EBITDAR: CST net income(a) $ 260 $ 85 $ 306
$ 124 Interest expense 11 10 34 30 Income tax expense 146 45 170 66
Depreciation, amortization and accretion 44 34
128 100 EBITDA 461 174 638 320 Minimum rent
expense(b) 15 11 39 28 EBITDAR $
476 $ 185 $ 677 $ 348 CST net income $ 260 $ 85 Gain
on sale of assets (350 ) — Acquisition and discrete professional
fees
7
— Severance 2 — Tax expense (benefit)
120
— Adjusted net income $
39
$ 85 Diluted earnings per common share $ 3.41 $ 1.12
Gain on sale of assets (4.59 ) — Acquisition and discrete
professional fees
0.09
— Severance 0.03 — Tax expense (benefit) $
1.57
$ — Diluted earnings per common share - adjusted $
0.51
$ 1.12
Weighted-average common shares outstanding
- assuming dilution (in thousands)
76,221 75,903
(a) The CST Brands, Inc. Statements of Income are presented
on a consolidated basis; however, the amounts presented in the
table above account for CST’s investment in CrossAmerica under the
equity method of accounting. CrossAmerica is a consolidated
variable interest entity; however, management reviews the results
of operations of CrossAmerica under the equity method of accounting
because of CST’s limited ownership interest of CrossAmerica’s
outstanding units. Net income and earnings per share attributable
to CST are unchanged under the equity method of accounting from
consolidating CrossAmerica. CST’s operating segments are presented
before intercompany eliminations with CrossAmerica. Therefore, the
U.S. Retail segment includes in cost of sales the wholesale fuel
costs for sites supplied by CrossAmerica and operating expenses
include rent from sites leased from CrossAmerica. (b) Minimum rent
expense is defined in the CST Credit Facility as rent expense
accrued during the period in accordance with U.S. GAAP, less
contingent rentals.
About CST Brands, Inc.
CST Brands, Inc. (NYSE: CST), a Fortune 500 Company, is one of
the largest independent retailers of motor fuels and convenience
merchandise in North America. Based in San Antonio, Texas, CST
employs over 14,000 Team Members at over 2,000 locations throughout
the Southwestern United States, Georgia, Florida, New York and
Eastern Canada offering a broad array of convenience merchandise,
beverages, snacks and prepared fresh food. In the U.S., Corner
Stores, Nice N Easy Grocery Shoppes, and Flash Foods stores proudly
sell a broad offering of branded and unbranded fuel and proprietary
baked goods and fresh food, packaged private label products, U
Force energy and sport drinks, Freestyle soft drinks and signature
ICEE drinks. In Canada, CST is the exclusive provider of Ultramar
fuel and its Dépanneur du Coin and Corner Stores sell signature
Transit Café coffee, proprietary baked goods and fresh food and
private label packaged goods. CST also owns the general partner of
CrossAmerica Partners LP, a master limited partnership and
wholesale distributor of fuels, based in Allentown, Pennsylvania.
For more information about CST, please visit www.cstbrands.com.
Safe Harbor Statement
Statements made in this press release relating to future plans,
events, or financial condition or performance are "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements can generally
be identified by the use of words such as "expect," "plan,"
"anticipate," "intend," "outlook," "guidance," "believes,"
"should," "target," "goal," "forecast," "will," "may" or words of
similar meaning. Forward-looking statements are likely to address
matters such as the companies’ respective or combined anticipated
sales, expenses, margins, tax rates, capital expenditures, profits,
cash flows, liquidity and debt levels, as well as their pricing and
merchandising strategies and their anticipated impact and
intentions with respect to the construction of new stores,
including additional quick service restaurants, and the remodeling
and addition of new equipment and products to existing stores.
These forward-looking statements are based on the companies’
current plans and expectations and involve a number of risks and
uncertainties that could cause actual results and events to vary
materially from the results and events anticipated or implied by
such forward-looking statements.
The following factors, among others, could cause actual results
and events to differ materially from those expressed or implied in
the forward-looking statements: (1) the occurrence of any event,
change or other circumstances that could give rise to the
termination of the merger agreement; (2) the inability to complete
the transactions contemplated by the merger agreement in a timely
manner or at all, including due to the failure to obtain the
required stockholder approval or failure to receive necessary
governmental or regulatory approvals required to complete the
transactions contemplated by the merger agreement; (3) the risk of
not fully realizing expected synergies in the timeframe expected or
at all; (4) the risk that the proposed transactions disrupt current
plans and operations, increase operating costs, result in
management distraction and the potential difficulties in
maintaining relationships with customers, suppliers and other third
parties and employee retention as a result of the announcement and
consummation of such transactions; (5) the outcome of any legal
proceedings instituted against the companies following announcement
of the merger agreement and transactions contemplated therein; and
(6) the possibility that the companies may be adversely affected by
other economic, business, and/or competitive factors.
Any number of other factors could affect actual results and
events, including, without limitation; the ability to enhance
operating performance through in-store initiatives, store remodel
programs and the addition of new equipment and products to existing
stores; fluctuations in domestic and global petroleum and fuel
markets; realizing expected benefits from fuel supply agreements;
changes in the competitive landscape of the convenience store
industry, including fuel stations and other non-traditional
retailers located in the companies’ markets; the effect of national
and regional economic conditions on the convenience store industry
and the companies’ markets; the global financial crisis and
uncertainty in global economic conditions; wholesale cost increases
of, and tax increases on, tobacco products; the effect of regional
weather conditions and climate change on customer traffic and
spending; legal, technological, political and scientific
developments regarding climate change; financial difficulties of
suppliers, including the companies’ principal suppliers of fuel and
merchandise, and their ability to continue to supply their stores;
the companies’ financial leverage and debt covenants; a disruption
of IT systems or a failure to protect sensitive customer, employee
or vendor data; the actual operating results of new or acquired
stores; environmental risks associated with selling petroleum
products; governmental laws and regulations, including those
relating to the environment and the impact of mandated health care
laws; unanticipated legal and other expenses, and other risk
factors described in the company's Definitive Proxy Statement,
filed with the SEC on October 11, 2016, the company's latest Annual
Report on Form 10-K, filed with the SEC on February 19, 2016 and
the company's subsequent Quarterly Reports on Form 10-Q filed
thereafter and other reports and documents we file with the SEC.
While the Company may elect to update these forward-looking
statements at some point in the future, it specifically disclaims
any obligation to do so.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161107006584/en/
CST Brands, Inc.Investors:Randy Palmer,
210-692-2160Executive Director – Investor
RelationsorMedia:Lisa Koenig, Director of Communications,
210-692-2659orThe DeBerry Group,Melissa Ludwig or Trish DeBerry,
210-223-2772
Cst Brands, Inc. (NYSE:CST)
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