ARKO Corp

Previous wording

Based in Richmond, VA, we are a leading independent convenience store operator and, as of June 30, 2024, we were the sixth largest convenience store chain in the United States (“U.S.”) ranked by store count, operating 1,548 retail convenience stores. As of June 30, 2024, we operated the stores under more than 25 regional store brands including 1-Stop, Admiral, Apple Market®, BreadBox, Corner Mart, Dixie Mart, ExpressStop, E-Z Mart®, fas mart®, fastmarket®, Flash Market, Handy Mart, Jetz, Jiffi Stop®, Jiffy Stop, Li’l Cricket, Market Express, Next Door Store®, Pride, Roadrunner Markets, Rose Mart, Rstore, Scotchman®, shore stop®, Speedy’s, SpeedyQ, Town Star, Uncle’s, Village Pantry® and Young’s. As of June 30, 2024, we also supplied fuel to 1,794 dealers and operated 294 cardlock locations (unstaffed fueling locations). We are well diversified geographically and as of June 30, 2024, operated in the District of Columbia and more than 30 states in the Mid-Atlantic, Midwestern, Northeastern, Southeastern and Southwestern U.S.

Current wording

Based in Richmond, VA, we are a leading independent convenience store operator and, as of September 30, 2024, we were the sixth largest convenience store chain in the United States (“U.S.”) ranked by store count, operating 1,491 retail convenience stores. As of September 30, 2024, we operated the stores under more than 25 regional store brands including 1-Stop, Admiral, Apple Market®, BreadBox, Corner Mart, Dixie Mart, ExpressStop, E-Z Mart®, fas mart®, fastmarket®, Flash Market, Handy Mart, Jetz, Jiffi Stop®, Jiffy Stop, Li’l Cricket, Market Express, Next Door Store®, Pride, Roadrunner Markets, Rose Mart, Rstore, Scotchman®, shore stop®, Speedy’s, SpeedyQ, Town Star, Uncle’s, Village Pantry® and Young’s. As of September 30, 2024, we also supplied fuel to 1,832 dealer locations and operated 281 cardlock locations (unstaffed fueling locations). We are well diversified geographically and as of September 30, 2024, operated in the District of Columbia and more than 30 states in the Mid-Atlantic, Midwestern, Northeastern, Southeastern and Southwestern U.S.

Previous wording

Our primary business is the operation of convenience stores, and we generate a significant portion of our revenue from the retail sale of products and fuel at our stores. Consequently, our retail stores generate a large proportion of our profitability. We focus our marketing and merchandising initiatives at our retail stores on offering our customers an assortment of products with an attractive value proposition. Our retail offering includes a wide array of cold and hot foodservice, beverages, cigarettes and other tobacco products, candy, salty snacks, grocery, beer and general merchandise. We have foodservice offerings at approximately 1,240 stores, which include hot and fresh grab-n-go foods, deli, fried chicken, bakery, pizza, roller grill items and other prepared foods. In the first quarter of 2024, we launched an extensive new pizza program that offers private label pizza, at an attractive value of $4.99 for enrolled loyalty members. We currently offer our private label pizza at approximately 1,200 stores as take-and-bake from the freezer, and as fresh and hot pizza either whole or by the slice at approximately 240 stores. We supplement our foodservice offering with approximately 124 quick service major national brand restaurants. Relevant and delicious food offerings are a key strategic priority for us, and we expect to maintain a high degree of focus on frozen grab-n-go and enhanced hot food capabilities. Additionally, we provide a number of traditional convenience store services, including lottery, prepaid products, gift cards, money orders, ATMs, gaming, and other ancillary product and service offerings. We also generate revenues from car washes at approximately 95 of our locations.

Current wording

Our primary business is the operation of convenience stores, and we generate a significant portion of our revenue from the retail sale of products and fuel at our stores. Consequently, our retail stores generate a large proportion of our profitability. We focus our marketing and merchandising initiatives at our retail stores on offering our customers an assortment of products with an attractive value proposition. Our retail offering includes a wide array of cold and hot foodservice, beverages, cigarettes and other tobacco products, candy, salty snacks, grocery, beer and general merchandise. We have foodservice offerings at approximately 1,190 stores, which include hot and fresh grab-n-go foods, deli, fried chicken, bakery, pizza, roller grill items and other prepared foods. In the first quarter of 2024, we launched an extensive new pizza program that offers private label pizza, at an attractive value of $4.99 for enrolled loyalty members. We currently offer our private label pizza at approximately 1,160 stores as take-and-bake from the freezer, and as fresh and hot pizza either whole or by the slice at approximately 235 stores. We supplement our foodservice offering with approximately 120 quick service major national brand restaurants. Relevant and delicious food offerings are a key strategic priority for us, and we expect to maintain a high degree of focus on frozen grab-n-go and enhanced hot food capabilities. Additionally, we provide a number of traditional convenience store services, including lottery, prepaid products, gift cards, money orders, ATMs, gaming, and other ancillary product and service offerings. We also generate revenues from car washes at approximately 85 of our locations.

Previous wording

We had approximated 2.14 million enrolled members in our fas REWARDS® loyalty program at the end of the first half of 2024, representing an increase of approximately 45% from the end of the first half of 2023. Our fas REWARDS® loyalty program is available in the majority of our stores and offers enrolled loyalty members in store exclusive promotional pricing, in-app member only HOT deals not available in stores, as well as the ability to earn points that can be redeemed for either fuel or merchandise savings. Other in-app features include order and delivery, age verified offers on tobacco and alcohol, and a store locator with current gas prices at GPM stores nearby to members.

Current wording

We had approximately 2.23 million enrolled members in our fas REWARDS® loyalty program at the end of the third quarter of 2024, representing an increase of approximately 21% from the end of the third quarter of 2023. Our fas REWARDS® loyalty program is available in the majority of our stores and offers enrolled loyalty members in store exclusive promotional pricing, in-app member only deals not available without the app, as well as the ability to earn points that can be redeemed for either fuel or merchandise savings. Other in-app features include order and delivery, age verified offers on tobacco and alcohol, and a store locator with current gas prices at GPM stores nearby to members.

Previous wording

Our wholesale segment supplies fuel to dealers, on either a consignment or cost plus basis. For consignment arrangements, we retain ownership of the fuel inventory at the site, are responsible for the pricing of the fuel to the end consumer and share a portion of the gross profit earned from the sale of fuel by the consignment dealers. For cost plus arrangements, we sell fuel to dealers and bulk and spot purchasers on a fixed-fee basis. The sales price is determined according to the terms of the relevant agreement, which typically reflects our total fuel costs plus the cost of transportation and a margin, with us generally retaining the prompt pay discounts and rebates.

Current wording

Our wholesale segment supplies fuel to dealers, on either a consignment or cost plus basis. For consignment arrangements, we retain ownership of the fuel inventory at the site, are responsible for the pricing of the fuel to the end consumer and share a portion of the gross profit earned from the sale of fuel with the consignment dealers. For cost plus arrangements, we sell fuel to dealers and bulk and spot purchasers on a fixed-fee basis. The sales price is determined according to the terms of the relevant agreement, which typically reflects our total fuel costs plus the cost of transportation and a margin, with us generally retaining the prompt pay discounts and rebates.

Previous wording

Our GPMP segment engages in the wholesale distribution of fuel to substantially all of our sites that sell fuel in the retail and wholesale segments, as well as to a limited number of third-party dealers and bulk purchasers. GPM Petroleum LP (“GPMP”) sells fuel at GPMP’s cost of fuel (including taxes and transportation) plus a fixed margin and charges a fixed fee primarily to sites in the fleet fueling segment which are not supplied by GPMP.

Current wording

Our GPMP segment engages in the wholesale distribution of fuel to substantially all of our sites that sell fuel in the retail and wholesale segments, as well as to a limited number of third-party dealers. GPM Petroleum LP (“GPMP”) sells fuel at GPMP’s cost of fuel (including taxes and transportation) plus a fixed margin and charges a fixed fee primarily to sites in the fleet fueling segment which are not supplied by GPMP.

Previous wording

As part of our focus on accelerating organic growth, we are developing a multi-year transformation plan (the “Transformation Plan”), which is expected to include the following elements:

Current wording

As part of our focus on accelerating organic growth, we are continuing to develop our multi-year transformation plan (the “Transformation Plan”), which is expected to include the following elements, among others:

Previous wording

Leveraging our unique, multi-segment operating model through more active conversion of retail stores within our retail segment to dealer sites within our wholesale segment. Following our review of our retail store portfolio, we have identified and expect to convert a meaningful number of retail locations to dealer sites, which we expect will yield greater profitability. Conversions of certain retail stores benefit both our dealers and us. Dealers are able to leverage their own scale by taking additional sites, while we realize higher profit from ongoing fuel supply agreements and rental income than from continuing to operate these stores in our retail segment. These conversions also will allow us to focus and better prioritize future investments in our remaining retail stores. By the end of the third quarter of 2024, we expect to have converted approximately 40 retail stores to dealer sites, of which a small number had converted as of the end of the second quarter of 2024.

Current wording

Leveraging our unique, multi-segment operating model through more active conversion of retail stores within our retail segment to dealer sites within our wholesale segment. Following our review of our retail store portfolio, we have identified and expect to convert a meaningful number of retail locations to dealer sites, which we expect will yield greater profitability. Conversions of certain retail stores benefit both our dealers and us. Dealers are able to leverage their own scale by taking additional sites, while we realize higher profit from ongoing fuel supply agreements and rental income than from continuing to operate these stores in our retail segment. These conversions also will allow us to focus and better prioritize future investments in our remaining retail stores. In the nine months ended September 30, 2024, we converted 51 retail stores to dealer sites, and we expect to convert another approximately 100 retail stores by the end of the fourth quarter of 2024.

Previous wording

Additional targeted capital allocation toward strategic sub-segments of our retail stores intended to drive traffic and improve profitability. We plan to allocate capital based in part on a pilot program, currently in development, designed to improve the customer experience and value proposition, potentially including an expanded and refined offering across a larger store network, with a focus on food and an enhanced in-store experience. Currently, the pilot will focus on seven stores within one of our regions, with the goal of a region-wide roll out before, ultimately, the expansion of this program across our retail footprint. The Company expects to begin implementing the new design in the pilot stores in the fourth quarter of 2024.

Current wording

Additional targeted capital allocation toward strategic sub-segments of our retail stores, with a goal of increasing traffic and improving profitability. These investments will be guided by a pilot program currently in development, designed to enhance the customer experience and strengthen our value proposition, potentially including an expanded and refined offering across a larger store network, with a focus on food and an enhanced in-store experience. The pilot will focus on seven stores within one of our regions, with plans for a region-wide rollout before, ultimately, the expansion of this program across our retail footprint. The Company anticipates beginning permitting to implement the new design in the pilot stores in the fourth quarter of 2024, with remodeling activity to commence in early 2025.

Previous wording

As we proceed with this Transformation Plan, we may incur non-recurring associated expenses, including personnel costs, professional services fees, and losses on disposal of assets and impairment charges.

Current wording

As we proceed with this Transformation Plan, we may incur associated non-recurring expenses, including personnel costs, divestiture costs, professional services fees, and losses on disposal of assets and impairment charges.

Previous wording

We achieved strong store growth over the last decade, driven primarily by a highly successful acquisition strategy, inclusive of 26 completed acquisitions from 2013 through June 30, 2024. On March 1, 2023, we acquired 135 convenience stores and gas stations, 181 dealer locations, a commercial, government, and industrial business, and certain distribution and transportation assets from Transit Energy Group, LLC (the “TEG Acquisition”). On June 6, 2023, we completed our acquisition of 24 Uncle’s convenience stores located across Western Texas, 68 proprietary GASCARD-branded cardlock sites and 43 private cardlock sites for fleet fueling operations located in Western Texas and Southeastern New Mexico from WTG Fuels Holdings, LLC (the “WTG Acquisition”). On August 15, 2023, we acquired seven Speedy’s convenience stores located in Arkansas and Oklahoma, which were previously locations operated by a dealer to which we supplied fuel (the “Speedy’s Acquisition” and, together with the TEG Acquisition and the WTG Acquisition, the “2023 Acquisitions”). On April 9, 2024, we completed our acquisition of 21 SpeedyQ Markets convenience stores located in Michigan (the “SpeedyQ Acquisition”). Our strategic acquisitions have had, and may continue to have, a significant impact on our reported results and can make period to period comparisons of results difficult. We believe our significant size and scale aids our efforts to successfully deploy our organic growth strategies in our acquired assets, which we anticipate will result in value accretion.

Current wording

We achieved strong store growth over the last decade, driven primarily by a highly successful acquisition strategy, inclusive of 26 completed acquisitions from 2013 through September 30, 2024. On March 1, 2023, we acquired 135 convenience stores and gas stations, 181 dealer locations, a commercial, government, and industrial business, and certain distribution and transportation assets from Transit Energy Group, LLC (the “TEG Acquisition”). On June 6, 2023, we completed our acquisition of 24 Uncle’s convenience stores located across Western Texas, 68 proprietary GASCARD-branded cardlock sites and 43 private cardlock sites for fleet fueling operations located in Western Texas and Southeastern New Mexico from WTG Fuels Holdings, LLC (the “WTG Acquisition”). On August 15, 2023, we acquired seven Speedy’s convenience stores located in Arkansas and Oklahoma, which were previously locations operated by a dealer to which we supplied fuel (the “Speedy’s Acquisition” and, together with the TEG Acquisition and the WTG Acquisition, the “2023 Acquisitions”). On April 9, 2024, we completed our acquisition of 21 SpeedyQ Markets convenience stores located in Michigan (the “SpeedyQ Acquisition” and, together with the Speedy’s Acquisition, the “Speedy’s and SpeedyQ Acquisitions”). Our strategic acquisitions have had, and may continue to have, a significant impact on our reported results and can make period to period comparisons of results difficult. We believe our significant size and scale aids our efforts to successfully deploy our organic growth strategies in our acquired assets, which we anticipate will result in value accretion.

Previous wording

In recent years, the convenience store industry has focused on increasing and improving in-store foodservice offerings, including fresh foods, quick service restaurants and proprietary food offerings. We believe consumers may be more likely to patronize convenience stores that include new and improved food offerings, which may also lead to increased inside merchandise sales or fuel sales. Our current foodservice offering, which varies by store, primarily consists of hot and fresh grab-n-go foods, deli, fried chicken, bakery, pizza, roller grill items and other prepared foods. We have historically relied upon a limited number of franchised quick service restaurants and in-store delis to drive customer traffic. As a result, we believe that our under-penetration of foodservice presents an opportunity to expand foodservice offerings and margin in response to changing consumer behavior. In the first quarter of 2024, we launched an extensive new pizza program, as described above under “Overview.”

Current wording

In recent years, the convenience store industry has focused on increasing and improving in-store foodservice offerings, including fresh foods, quick service restaurants and proprietary food offerings. We believe consumers may be more likely to patronize convenience stores that include new and improved food offerings, which may also lead to increased inside merchandise sales or fuel sales. Our current foodservice offering, which varies by store, primarily consists of hot and fresh grab-n-go foods, deli, fried chicken, bakery, pizza, roller grill items and other prepared foods. We have historically relied upon a limited number of franchised quick service restaurants and in-store delis to drive customer traffic. As a result, we believe that our under-penetration of foodservice presents an opportunity to expand foodservice offerings and margin in response to changing consumer behavior. In the first quarter of 2024, we launched an extensive new pizza program, as described above under “Overview,” and we are working on expansion of our food offering as part of the Transformation Plan described above.

Previous wording

Results of Operations for the three and six months ended June 30, 2024 and 2023

Current wording

Results of Operations for the three and nine months ended September 30, 2024 and 2023

Previous wording

The table below shows our consolidated results for the three and six months ended June 30, 2024 and 2023, together with certain key metrics.

Current wording

The table below shows our consolidated results for the three and nine months ended September 30, 2024 and 2023, together with certain key metrics.

Previous wording

For the three months ended June 30, 2024, fuel revenue decreased by $69.6 million, or 3.6%, compared to the second quarter of 2023. The decrease in fuel revenue was attributable primarily to fewer same store gallons sold in the second quarter of 2024 compared to the second quarter of 2023, which was partially offset by incremental gallons sold related to the WTG, Speedy’s and SpeedyQ Acquisitions.

Current wording

For the three months ended September 30, 2024, fuel revenue decreased by $302.5 million, or 14.5%, compared to the third quarter of 2023. The decrease in fuel revenue was attributable primarily to fewer same store gallons sold in the third quarter of 2024 compared to the third quarter of 2023 and a decrease in the average price of fuel compared to the third quarter of 2023, which was partially offset by incremental gallons sold related to the Speedy’s and SpeedyQ Acquisitions.

Previous wording

For the three months ended June 30, 2024, merchandise revenue decreased by $10.3 million, or 2.1%, compared to the second quarter of 2023, primarily due to a decrease in same store merchandise revenues and a decrease in merchandise revenue from underperforming retail stores that we closed or converted to dealers, partially offset by incremental revenues from the WTG, Speedy’s and SpeedyQ Acquisitions.

Current wording

For the three months ended September 30, 2024, merchandise revenue decreased by $36.8 million, or 7.3%, compared to the third quarter of 2023, primarily due to a decrease in same store merchandise revenues and a decrease in merchandise revenue from underperforming retail stores that we closed or converted to dealers, partially offset by incremental revenues from the Speedy’s and SpeedyQ Acquisitions.

Previous wording

For the three months ended June 30, 2024, other revenue decreased $1.1 million or 4.0% compared to the second quarter of 2023, primarily due to the regulatory state-wide elimination of Virginia skill gaming machine income, which was partially offset by additional revenue from the WTG, Speedy’s and SpeedyQ Acquisitions.

Current wording

For the three months ended September 30, 2024, other revenue decreased $3.5 million or 11.9% compared to the third quarter of 2023, primarily due to the regulatory state-wide elimination of Virginia skill gaming machine income, which was partially offset by additional revenue from the Speedy’s and SpeedyQ Acquisitions.

Previous wording

For the three months ended June 30, 2024, total operating expenses decreased by $79.6 million, or 3.3%, compared to the second quarter of 2023. Fuel costs decreased $74.3 million, or 4.1%, compared to the second quarter of 2023 due to both fewer gallons sold and a lower average cost of fuel on a same store basis, which were partially offset by incremental gallons related to the WTG, Speedy’s and SpeedyQ Acquisitions. Merchandise costs decreased $11.4 million, or 3.5%, compared to the second quarter of 2023, consistent with merchandise revenues trends. For the three months ended June 30, 2024, site operating expenses increased $5.7 million, or 2.6%, compared to the second quarter of 2023 due to incremental expenses as a result of the WTG, Speedy’s and SpeedyQ Acquisitions, which was partially offset by a decrease in same store expenses, including lower personnel costs and credit card fees.

Current wording

For the three months ended September 30, 2024, total operating expenses decreased by $337.6 million, or 13.1%, compared to the third quarter of 2023. Fuel costs decreased $297.5 million, or 15.5%, compared to the third quarter of 2023 due to both a lower average cost of fuel and fewer gallons sold on a same store basis, which were partially offset by incremental gallons related to the Speedy’s and SpeedyQ Acquisitions. Merchandise costs decreased $30.1 million, or 8.7%, compared to the third quarter of 2023, consistent with merchandise revenues trends. For the three months ended September 30, 2024, site operating expenses decreased $4.0 million, or 1.7%, compared to the third quarter of 2023 primarily due to a decrease in same store expenses, including lower personnel costs and credit card fees, and a decrease from underperforming retail stores that we closed or converted to dealers, which were partially offset by incremental expenses as a result of the Speedy’s and SpeedyQ Acquisitions.

Previous wording

For the three months ended June 30, 2024, general and administrative expenses decreased $0.2 million, or 0.5%, compared to the second quarter of 2023, primarily due to a decrease of $1.8 million in share-based compensation expense, partially offset by incremental expenses principally associated with the WTG Acquisition and annual wage increases.

Current wording

For the three months ended September 30, 2024, general and administrative expenses decreased $5.5 million, or 12.4%, compared to the third quarter of 2023, primarily due to a decrease of $2.5 million in share-based compensation expense and lower incentive accruals, partially offset by annual wage increases.

Previous wording

For the three months ended June 30, 2024, depreciation and amortization expenses increased $0.7 million, or 2.3%, compared to the second quarter of 2023, primarily due to assets acquired in the previous twelve-month period.

Current wording

For the three months ended September 30, 2024, depreciation and amortization expenses decreased $0.6 million, or 1.7%, compared to the third quarter of 2023.

Previous wording

For the three months ended June 30, 2024, other expenses, net decreased by $4.7 million, compared to the second quarter of 2023 primarily due to lower acquisition costs and lower losses from disposal of assets and impairment charges in the second quarter of 2024.

Current wording

For the three months ended September 30, 2024, other expenses, net decreased by $2.7 million, compared to the third quarter of 2023 primarily due to higher income recorded for the fair value adjustment of contingent consideration in the third quarter of 2024, and lower losses from disposal of assets and impairment charges in the third quarter of 2024.

Previous wording

For the three months ended June 30, 2024, operating income was $42.9 million compared to $39.7 million for the three months ended June 30, 2023. The increase in operating income was primarily due to incremental income from the WTG, Speedy’s and SpeedyQ Acquisitions, an increase in fuel contribution from the fleet fueling sites not part of the WTG Acquisition (the “comparable fleet fueling sites”) and a decrease in same store site operating expenses, which was partially offset by a decrease in same store merchandise and fuel contribution.

Current wording

For the three months ended September 30, 2024, operating income was $41.6 million compared to $44.1 million for the three months ended September 30, 2023. The decrease in operating income was primarily due to a decrease in same store merchandise contribution and same store and wholesale fuel contribution, which was partially offset by incremental income from the Speedy’s and SpeedyQ Acquisitions, an increase in fleet fueling fuel contribution and a decrease in same store site operating expenses.

Previous wording

For the three months ended June 30, 2024, interest and other financial expenses, net increased by $1.2 million compared to the second quarter of 2023, primarily related to higher average outstanding debt balances, a higher average interest rate for the second quarter of 2024 and higher interest expenses related to financial liabilities, which was partially offset by an increase of $1.0 million in income recorded in the second quarter of 2024 compared to the prior year period for fair value adjustments related to the Public Warrants, Private Warrants and Additional Deferred Shares (each as defined in Note 11 to the Quarterly Financial Statements).

Current wording

For the three months ended September 30, 2024, interest and other financial expenses, net increased by $9.0 million compared to the third quarter of 2023, primarily related to higher average outstanding debt balances, a higher average interest rate for the third quarter of 2024, and an increase of $9.5 million in expenses recorded in the third quarter of 2024 compared to income recorded in the prior year period for fair value adjustments related to the Public Warrants, Private Warrants and Additional Deferred Shares (each as defined in Note 11 to the Quarterly Financial Statements), which was partially offset by additional interest income generated in the three months ended September 30, 2024.

Previous wording

For the three months ended June 30, 2024 and 2023, income tax expense was $7.5 million and $5.0 million, respectively.

Current wording

For the three months ended September 30, 2024 and 2023, income tax expense was $8.3 million and $8.0 million, respectively.

Previous wording

For the three months ended June 30, 2024 and 2023, net income attributable to the Company was $14.1 million and $14.4 million, respectively.

Current wording

For the three months ended September 30, 2024 and 2023, net income attributable to the Company was $9.7 million and $21.4 million, respectively.

Previous wording

For the three months ended June 30, 2024, Adjusted EBITDA was $80.1 million compared to $82.5 million for the three months ended June 30, 2023. The decrease resulted primarily from lower same store merchandise and fuel contribution and regulatory state-wide elimination of Virginia skill gaming machine income, as well as higher general and administrative expenses, partially offset by higher fuel contribution at comparable fleet fueling sites, lower same store operating expenses and incremental Adjusted EBITDA from the WTG, Speedy’s and SpeedyQ Acquisitions. Refer to “Use of Non-GAAP Measures” below for discussion of this non-GAAP performance measure and related reconciliation to net income.

Current wording

For the three months ended September 30, 2024, Adjusted EBITDA was $78.8 million compared to $87.3 million for the three months ended September 30, 2023. The decrease resulted primarily from lower same store merchandise and fuel contribution, lower wholesale fuel contribution and regulatory state-wide elimination of Virginia skill gaming machine income, partially offset by higher fleet fueling fuel contribution, lower same store operating expenses, lower general and administrative expenses and incremental Adjusted EBITDA from the Speedy’s and SpeedyQ Acquisitions. Refer to “Use of Non-GAAP Measures” below for discussion of this non-GAAP performance measure and related reconciliation to net income.

Previous wording

For the six months ended June 30, 2024, fuel revenue decreased by $99.9 million, or 2.8%, compared to the first half of 2023. The decrease in fuel revenue was attributable primarily to a decrease in the average price of fuel compared to the first half of 2023 and fewer same store gallons sold in the first half of 2024 compared to the first half of 2023, which was partially offset by incremental gallons sold related to the 2023 Acquisitions and the SpeedyQ Acquisition.

Current wording

For the nine months ended September 30, 2024, fuel revenue decreased by $402.4 million, or 7.1%, compared to the first three quarters of 2023. The decrease in fuel revenue was attributable primarily to a decrease in the average price of fuel compared to the first three quarters of 2023 and fewer same store gallons sold in the first three quarters of 2024 compared to the first three quarters of 2023, which was partially offset by incremental gallons sold related to the 2023 Acquisitions and the SpeedyQ Acquisition.

Previous wording

For the six months ended June 30, 2024, merchandise revenue increased by $4.1 million, or 0.5%, compared to the first half of 2023, primarily due to the 2023 Acquisitions and the SpeedyQ Acquisition. Offsetting this increase was a decrease in same store merchandise revenues and a decrease in merchandise revenue from underperforming retail stores that we closed or converted to dealers.

Current wording

For the nine months ended September 30, 2024, merchandise revenue decreased by $32.8 million, or 2.4%, compared to the first three quarters of 2023, primarily due to a decrease in same store merchandise revenues and a decrease in merchandise revenue from underperforming retail stores that we closed or converted to dealers. Offsetting this decrease was an increase due to the 2023 Acquisitions and the SpeedyQ Acquisition.

Previous wording

For the six months ended June 30, 2024, other revenue decreased by $1.1 million, or 2.0%, compared to the first half of 2023, primarily due to the regulatory state-wide elimination of Virginia skill gaming machine income, which was partially offset by additional revenue from the 2023 Acquisitions and the SpeedyQ Acquisition.

Current wording

For the nine months ended September 30, 2024, other revenue decreased by $4.5 million, or 5.5%, compared to the first three quarters of 2023, primarily due to the regulatory state-wide elimination of Virginia skill gaming machine income, which was partially offset by additional revenue from the 2023 Acquisitions and the SpeedyQ Acquisition.

Previous wording

For the six months ended June 30, 2024, total operating expenses decreased by $81.4 million, or 1.8%, compared to the first half of 2023. Fuel costs decreased $109.9 million, or 3.3%, compared to the first half of 2023 due to both fewer gallons sold and a lower average cost of fuel on a same store basis, which were partially offset by incremental gallons related to the 2023 Acquisitions and the SpeedyQ Acquisition. Merchandise costs decreased $9.0 million, or 1.5%, compared to the first half of 2023, consistent with merchandise revenues trends. For the six months ended June 30, 2024, site operating expenses increased $31.9 million, or 7.8%, compared to the first half of 2023 due to incremental expenses as a result of the 2023 Acquisitions and the SpeedyQ Acquisition and an increase in same store expenses, including higher personnel costs offset by lower credit card fees.

Current wording

For the nine months ended September 30, 2024, total operating expenses decreased by $419.0 million, or 5.9%, compared to the first three quarters of 2023. Fuel costs decreased $407.4 million, or 7.7%, compared to the first three quarters of 2023 due to both a lower average cost of fuel and fewer gallons sold on a same store basis, which were partially offset by incremental gallons related to the 2023 Acquisitions and the SpeedyQ Acquisition. Merchandise costs decreased $39.1 million, or 4.1%, compared to the first three quarters of 2023, consistent with merchandise revenues trends. For the nine months ended September 30, 2024, site operating expenses increased $28.0 million, or 4.4%, compared to the first three quarters of 2023 due to incremental expenses as a result of the 2023 Acquisitions and the SpeedyQ Acquisition and an increase in same store expenses, which were partially offset by a decrease in expenses from underperforming retail stores that we closed or converted to dealers.

Previous wording

For the six months ended June 30, 2024, general and administrative expenses increased $1.5 million, or 1.8%, compared to the first half of 2023, primarily due to incremental expenses principally associated with the 2023 Acquisitions, annual wage increases, and consulting support for the development of our Transformation Plan, partially offset by a decrease of $2.5 million in share-based compensation expense and lower incentive accruals.

Current wording

For the nine months ended September 30, 2024, general and administrative expenses decreased $4.0 million, or 3.1%, compared to the first three quarters of 2023, primarily due to a decrease of $5.0 million in share-based compensation expense and lower incentive accruals, partially offset by incremental expenses principally associated with the 2023 Acquisitions, annual wage increases, and consulting support for the development of our Transformation Plan.

Previous wording

For the six months ended June 30, 2024, depreciation and amortization expenses increased $4.1 million, or 6.6%, compared to the first half of 2023 primarily due to assets acquired in the previous twelve-month period, largely in connection with the 2023 Acquisitions and the SpeedyQ Acquisition.

Current wording

For the nine months ended September 30, 2024, depreciation and amortization expenses increased $3.5 million, or 3.7%, compared to the first three quarters of 2023 primarily due to assets acquired in the previous twelve-month period, largely in connection with the 2023 Acquisitions and the SpeedyQ Acquisition.

Previous wording

For the six months ended June 30, 2024, other expenses, net decreased by $4.9 million, compared to the first half of 2023 primarily due to lower acquisition costs.

Current wording

For the nine months ended September 30, 2024, other expenses, net decreased by $7.7 million, compared to the first three quarters of 2023 primarily due to lower acquisition costs.

Previous wording

For the six months ended June 30, 2024, operating income was $38.1 million compared to $48.6 million for the six months ended June 30, 2023. The decrease in operating income was primarily due to reduced fuel contribution at same stores, wholesale sites not part of the 2023 Acquisitions (the “comparable wholesale sites”) and the comparable fleet fueling sites, a decrease in same store merchandise contribution, and an increase in same store expenses, which was partially offset by incremental income from the 2023 Acquisitions and the SpeedyQ Acquisition.

Current wording

For the nine months ended September 30, 2024, operating income was $79.7 million compared to $92.7 million for the nine months ended September 30, 2023. The decrease in operating income was primarily due to lower same store merchandise and fuel contribution, reduced fuel contribution at wholesale sites not part of the 2023 Acquisitions (the “comparable wholesale sites”) and an increase in same store expenses, which was partially offset by an increase in fleet fueling fuel contribution at fleet fueling sites not part of the 2023 Acquisitions (the “comparable fleet fueling sites”) and incremental income from the 2023 Acquisitions and the SpeedyQ Acquisition.

Previous wording

For the six months ended June 30, 2024, interest and other financial expenses, net decreased by $9.9 million compared to the first half of 2023, primarily related to an increase of $7.0 million in income recorded in the first half of 2024 compared to the prior year period for fair value adjustments related to the Public Warrants, Private Warrants and Additional Deferred Shares and approximately $9.2 million recorded as financial income related to the issuance of the First Installment Shares (as defined in Note 4 to our Quarterly Financial Statements) as payment of deferred consideration and the settlement of deferred consideration related to the TEG Acquisition, which was partially offset by higher average outstanding debt balances, a higher average interest rate for the first half of 2024 and higher interest expenses related to financial liabilities.

Current wording

For the nine months ended September 30, 2024, interest and other financial expenses, net decreased by $0.9 million compared to the first three quarters of 2023, primarily related approximately $9.2 million recorded as financial income related to the issuance of the First Installment Shares (as defined in Note 4 to our Quarterly Financial Statements) as payment of deferred consideration and the settlement of deferred consideration related to the TEG Acquisition, which was partially offset by a decrease of $2.4 million in income recorded in the first three quarters of 2024 compared to the prior year period for fair value adjustments related to the Public Warrants, Private Warrants and Additional Deferred Shares, higher average outstanding debt balances, a higher average interest rate for the first three quarters of 2024 and higher interest expenses related to financial liabilities.

Previous wording

For the six months ended June 30, 2024 and 2023, income tax expense was $0.8 million and $2.9 million, respectively.

Current wording

For the nine months ended September 30, 2024 and 2023, income tax expense was $9.1 million and $10.8 million, respectively.

Previous wording

For the six months ended June 30, 2024 and 2023, net income attributable to the Company was $13.5 million and $11.9 million, respectively.

Current wording

For the nine months ended September 30, 2024 and 2023, net income attributable to the Company was $23.1 million and $33.3 million, respectively.

Previous wording

For the six months ended June 30, 2024, Adjusted EBITDA was $113.2 million compared to $127.2 million for the six months ended June 30, 2023. The decrease resulted primarily from lower same store merchandise and fuel contribution, lower fuel contribution from the comparable wholesale sites and regulatory state-wide elimination of Virginia skill gaming machine income, as well as higher general and administrative expenses and same store expenses, partially offset by incremental Adjusted EBITDA from the 2023 Acquisitions and the SpeedyQ Acquisition. Refer to “Use of Non-GAAP Measures” below for discussion of this non-GAAP performance measure and related reconciliation to net income.

Current wording

For the nine months ended September 30, 2024, Adjusted EBITDA was $192.0 million compared to $214.5 million for the nine months ended September 30, 2023. The decrease resulted primarily from lower same store merchandise and fuel contribution, lower fuel contribution from the comparable wholesale sites and regulatory state-wide elimination of Virginia skill gaming machine income, as well as higher same store expenses, partially offset by an increase in comparable fleet fueling fuel contribution and incremental Adjusted EBITDA from the 2023 Acquisitions and the SpeedyQ Acquisition. Refer to “Use of Non-GAAP Measures” below for discussion of this non-GAAP performance measure and related reconciliation to net income.

Previous wording

When analyzing the incremental impact of the 2023 Acquisitions for the six months period ended June 30, 2024 compared to 2023, the TEG Acquisition’s results for the three months ended June 30, 2024 and 2023 are excluded as they are already reflected in same store and comparable wholesale sites results, as defined below.

Current wording

When analyzing the incremental impact of the 2023 Acquisitions for the nine months ended September 30, 2024 compared to 2023, the TEG Acquisition’s results for the second and third quarters of 2024 and 2023 and the WTG Acquisition’s results for the third quarters of 2024 and 2023 are excluded as they are already reflected in same store and comparable wholesale and fleet fueling sites results, as defined above.

Previous wording

The table below shows the results of the retail segment for the three and six months ended June 30, 2024 and 2023, together with certain key metrics for the segment.

Current wording

The table below shows the results of the retail segment for the three and nine months ended September 30, 2024 and 2023, together with certain key metrics for the segment.

Previous wording

The tables below show financial information and certain key metrics of recent acquisitions in the retail segment that do not have (or have only partial) comparable information for any of the prior periods.

Current wording

The table below shows financial information and certain key metrics of recent acquisitions in the retail segment that do not have (or have only partial) comparable information for any of the prior periods.