UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2004
Commission file number 333-87371
PETRO STOPPING CENTERS HOLDINGS, L.P.
(Exact name of the registrant as specified in its charter)
| Delaware | 74-2922482 | |
| (State or other jurisdiction of incorporation or organization) |
(IRS Employer Identification No.) | |
| 6080 Surety Dr. El Paso, Texas |
79905 | |
| (Address of principal executive offices) | (Zip Code) | |
Registrant’s telephone number, including area code: (915) 779-4711
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. Not applicable.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
PETRO STOPPING CENTERS HOLDINGS, L.P.
UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
| December 31, 2003 |
September 30, 2004 |
|||||||
| Assets | ||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 18,023 | $ | 22,571 | ||||
| Trade accounts receivable, net |
1,315 | 3,752 | ||||||
| Inventories, net |
25,410 | 29,046 | ||||||
| Other current assets |
1,215 | 1,880 | ||||||
| Due from affiliates |
3,396 | 3,498 | ||||||
| Total current assets |
49,359 | 60,747 | ||||||
| Property and equipment, net |
208,373 | 204,057 | ||||||
| Deferred debt issuance costs, net |
7,228 | 13,734 | ||||||
| Other assets |
14,306 | 12,585 | ||||||
| Goodwill |
31,881 | 31,881 | ||||||
| Total assets |
$ | 311,147 | $ | 323,004 | ||||
| Liabilities and Partners’ Deficit | ||||||||
| Current liabilities: |
||||||||
| Current portion of long-term debt |
$ | 9,500 | $ | 10,490 | ||||
| Trade accounts payable |
13,928 | 14,096 | ||||||
| Accrued expenses and other liabilities |
26,201 | 28,846 | ||||||
| Due to affiliates |
19,104 | 15,705 | ||||||
| Total current liabilities |
68,733 | 69,137 | ||||||
| Other liabilities |
789 | 799 | ||||||
| Mandatorily redeemable preferred partnership interests |
— | 42,482 | ||||||
| Long-term debt, excluding current portion |
257,901 | 284,403 | ||||||
| Total long-term liabilities |
258,690 | 327,684 | ||||||
| Total liabilities |
327,423 | 396,821 | ||||||
| Commitments and contingencies |
||||||||
| Mandatorily redeemable preferred partnership interests |
44,274 | 5,000 | ||||||
| Contingently redeemable warrants |
4,200 | 5,500 | ||||||
| Partners’ deficit |
||||||||
| General partner’s |
(1,568 | ) | (1,786 | ) | ||||
| Limited partners’ |
(62,724 | ) | (82,071 | ) | ||||
| Negative capital accounts of minority partners in consolidated subsidiaries |
(458 | ) | (460 | ) | ||||
| Total partners’ deficit |
(64,750 | ) | (84,317 | ) | ||||
| Total liabilities and partners’ deficit |
$ | 311,147 | $ | 323,004 | ||||
See accompanying notes to unaudited consolidated condensed financial statements.
1
PETRO STOPPING CENTERS HOLDINGS, L.P.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(in thousands)
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2003 |
2004 |
2003 |
2004 |
|||||||||||||
| Net revenues: |
||||||||||||||||
| Fuel (including motor fuel taxes) |
$ | 204,782 | $ | 270,145 | $ | 607,885 | $ | 743,662 | ||||||||
| Non-fuel |
66,919 | 68,046 | 186,588 | 196,469 | ||||||||||||
| Total net revenues |
271,701 | 338,191 | 794,473 | 940,131 | ||||||||||||
| Costs and expenses: |
||||||||||||||||
| Cost of sales |
||||||||||||||||
| Fuel (including motor fuel taxes) |
193,544 | 257,861 | 576,556 | 709,731 | ||||||||||||
| Non-fuel |
27,457 | 27,249 | 74,835 | 78,683 | ||||||||||||
| Operating expenses |
34,102 | 35,380 | 98,333 | 103,779 | ||||||||||||
| General and administrative |
4,089 | 4,659 | 11,678 | 12,654 | ||||||||||||
| Depreciation and amortization |
3,993 | 3,975 | 11,856 | 11,857 | ||||||||||||
| Loss on disposition of fixed assets |
3 | 33 | 12 | 66 | ||||||||||||
| Total costs and expenses |
263,188 | 329,157 | 773,270 | 916,770 | ||||||||||||
| Operating income |
8,513 | 9,034 | 21,203 | 23,361 | ||||||||||||
| Loss on retirement of debt |
— | — | — | (15,429 | ) | |||||||||||
| Retired debt restructuring costs |
— | — | — | (794 | ) | |||||||||||
| Equity in income of affiliate |
196 | 240 | 354 | 398 | ||||||||||||
| Interest income |
17 | 48 | 47 | 101 | ||||||||||||
| Interest expense |
(8,779 | ) | (8,188 | ) | (26,085 | ) | (25,444 | ) | ||||||||
| Income (loss) before cumulative effect of a change in accounting principle and minority interest |
(53 | ) | 1,134 | (4,481 | ) | (17,807 | ) | |||||||||
| Cumulative effect of a change in accounting principle |
— | — | (397 | ) | — | |||||||||||
| Income (loss) before minority interest |
(53 | ) | 1,134 | (4,878 | ) | (17,807 | ) | |||||||||
| Minority interest in income (loss) of consolidated subsidiaries |
21 | 18 | 36 | (2 | ) | |||||||||||
| Net income (loss) |
(74 | ) | 1,116 | (4,914 | ) | (17,805 | ) | |||||||||
| Accrual of preferred return on mandatorily redeemable preferred partnership interests |
(998 | ) | (150 | ) | (2,917 | ) | (450 | ) | ||||||||
| Net income (loss) applicable to common partners |
$ | (1,072 | ) | $ | 966 | $ | (7,831 | ) | $ | (18,255 | ) | |||||
See accompanying notes to unaudited consolidated condensed financial statements.
2
PETRO STOPPING CENTERS HOLDINGS, L.P.
UNAUDITED CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN PARTNERS’ DEFICIT
For the Nine Months Ended September 30, 2004
(in thousands)
| General Partner’s Deficit |
Limited Partners’ Deficit |
Negative Capital Accounts of Minority Partners in Consolidated Subsidiaries |
Total Partners’ Deficit |
|||||||||||||
| Balances, December 31, 2003 |
$ | (1,568 | ) | $ | (62,724 | ) | $ | (458 | ) | $ | (64,750 | ) | ||||
| Net loss |
(199 | ) | (17,604 | ) | (2 | ) | (17,805 | ) | ||||||||
| Accrual of preferred return on mandatorily redeemable preferred partnership interests |
(5 | ) | (445 | ) | — | (450 | ) | |||||||||
| Valuation adjustment of contingently redeemable warrants |
(14 | ) | (1,286 | ) | — | (1,300 | ) | |||||||||
| Partners’ minimum tax distributions |
— | (12 | ) | — | (12 | ) | ||||||||||
| Balances, September 30, 2004 |
$ | (1,786 | ) | $ | (82,071 | ) | $ | (460 | ) | $ | (84,317 | ) | ||||
See accompanying notes to unaudited consolidated condensed financial statements.
3
PETRO STOPPING CENTERS HOLDINGS, L.P.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(in thousands)
| Nine Months Ended September 30, |
||||||||
| 2003 |
2004 |
|||||||
| Cash flows from operating activities: |
||||||||
| Net loss |
$ | (4,914 | ) | $ | (17,805 | ) | ||
| Adjustments to reconcile net loss to net cash provided by operating activities: |
||||||||
| Minority interest in income (loss) of consolidated subsidiaries |
36 | (2 | ) | |||||
| Depreciation and amortization |
11,856 | 11,857 | ||||||
| Write-off of original issue discount |
— | 19,443 | ||||||
| Write-off of deferred financing costs associated with retired debt |
— | 6,844 | ||||||
| Cumulative effect of a change in accounting principle |
397 | — | ||||||
| Deferred debt issuance cost amortization and accretion of original issue discount |
12,816 | 5,271 | ||||||
| Preferred return on mandatorily redeemable preferred partnership interests |
— | 2,758 | ||||||
| Provision for bad debt |
129 | 119 | ||||||
| Equity in income of affiliate |
(354 | ) | (398 | ) | ||||
| Loss on disposition of fixed assets |
12 | 66 | ||||||
| Other operating activities |
34 | 29 | ||||||
| Increase (decrease) from changes in: |
||||||||
| Trade accounts receivable |
364 | (2,556 | ) | |||||
| Inventories |
1,201 | (3,636 | ) | |||||
| Other current assets |
133 | (665 | ) | |||||
| Due from affiliates |
(1,204 | ) | (102 | ) | ||||
| Due to affiliates |
8,811 | (3,399 | ) | |||||
| Trade accounts payable |
1,320 | 8,653 | ||||||
| Accrued expenses and other liabilities |
916 | 2,976 | ||||||
| Net cash provided by operating activities |
31,553 | 29,453 | ||||||
| Cash flows from investing activities: |
||||||||
| Proceeds from disposition of fixed assets and land held for sale |
22 | 983 | ||||||
| Purchases of property and equipment |
(3,910 | ) | (7,800 | ) | ||||
| Increase in other assets, net |
96 | (277 | ) | |||||
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