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Parkland Reports 2023 Second Quarter Results

Second quarter Adjusted EBITDA of $470 million
Publishes 2022 Sustainability Report

CALGARY, AB, Aug. 3, 2023 /PRNewswire-HISPANIC PR WIRE/ — Parkland Corporation (”Parkland”, “we”, the “Company”, or “our”) (TSX: PKI), today announced its financial and operating results for the three and six months ended June 30, 2023.

Q2 2023 Highlights

  • Adjusted EBITDA attributable to Parkland (”Adjusted EBITDA”1) of $470 million, up 4 percent from the second quarter of 2022.
  • Net earnings attributable to Parkland (”net earnings”) of $78 million ($0.44 per share, basic) down 4 percent from the second quarter of 2022, and Adjusted earnings attributable to Parkland (”Adjusted earnings”2) of $130 million ($0.74 per share, basic) down 22 percent from the second quarter of 2022.
  • Cash generated from (used in) operating activities of $521 million ($2.97 per share, basic3) up 53 percent from the second quarter of 2022.
  • Leverage ratio4 of 3.3x and liquidity available3 of $1.6 billion.
  • In July, launched proprietary food offering, Bites ON the RUN by M&M Food Market, within a standalone ON the RUN convenience store in Montreal.
  • As of July 31, 2023, completed or reached agreements to sell non-core assets totaling approximately $100 million.

“I would like to thank the Parkland team for safe, consistent execution this quarter. We are building tremendous momentum across Parkland, positioning us to deliver a strong year at the higher end of our 2023 Adjusted EBITDA guidance,” said Bob Espey, President and Chief Executive Officer. “We are advancing every part of our strategy, driving organic growth through customer-focused marketing programs, capturing synergies and cost efficiencies, and advancing our portfolio optimization efforts. I am confident we will deliver our $2 billion Adjusted EBITDA ambition by 2025 without further acquisitions, while reducing leverage, and improving shareholder returns.”

Q2 2023 Segment Highlights

  • Canada delivered Adjusted EBITDA of $150 million, down 14 percent from Q2 2022 ($174 million). Fuel unit margins were lower than the comparable historical highs in the second quarter of 2022. Fuel volume increased from the prior year due to Company Volume Same Store Sales Growth (”SSSG”2) of 9.3 percent and the incremental benefit of 2022 acquisitions. Food and Company C-Store SSSG (excluding cigarettes)2 increased to 3.1 percent, up from (0.6) percent in Q2 2022.
  • International delivered Adjusted EBITDA of $168 million, up 93 percent, from Q2 2022 ($87 million). Performance was driven by the consolidation of Sol, higher volumes in our retail and contracted commercial businesses, organic growth in our aviation business, and contributions from our Jamaica acquisition.
  • USA delivered Adjusted EBITDA of $74 million, up 45 percent from Q2 2022 ($51 million). Strong performance reflects the capabilities of our USA team and was underpinned by strong fuel unit margins. Favourable market conditions and strong market positions enabled us to capture margin opportunities.
  • Refining delivered Adjusted EBITDA of $109 million, down 34 percent, from Q2 2022 ($164 million) primarily reflecting lower crack spreads. The scheduled maintenance turnaround was completed in early April and composite utilization5 was 91.0 percent.
  • The Company realized non-recurring foreign exchange gains of $25 million on the settlement of financing balances during the quarter.
  • Parkland’s total recordable injury frequency rate5 on a trailing-twelve-months basis was 0.87, a decrease of 18 percent compared to 1.06 in the second quarter of 2022.

___________________________

1 Total of segments measure. See “Total of Segments Measures” section of this news release.

2 Non-GAAP financial measure or non-GAAP financial ratio. See “Non-GAAP Financial Measures and Ratios” section of this news release.

3 Supplementary financial measure. See “Supplementary Financial Measures” section of this news release.

4 Capital management measure. See “Capital Management Measures” section of this news release.

5 Non-financial measure. See “Non-Financial Measures” section of this news release.


2022 Sustainability Report

Today, we published our fourth Sustainability Report. Titled ‘Drive to Zero’, it outlines our strategy and the actions we are taking to drive sustainable growth and shareholder returns. The report highlights the many successful initiatives underway. Among them are: industry-leading efforts on co-processing low-carbon, renewable fuels; safer, more diverse, and inclusive work environments; and the incorporation of sustainability metrics into executive compensation.

Parkland’s Sustainability Report can be viewed here:
https://www.parkland.ca/sustainability/sustainability-report

Consolidated Financial Overview

($ millions, unless otherwise noted)

Three months ended June 30,

Financial Summary

2023

2022

Sales and operating revenue

7,819

9,715

Adjusted EBITDA attributable to Parkland (”Adjusted EBITDA”)(1)

470

450

Canada

150

174

International

168

87

USA

74

51

Refining

109

164

Corporate

(31)

(26)

Net earnings (loss) attributable to Parkland

78

81

Net earnings (loss) per share – basic ($ per share)

0.44

0.52

Net earnings (loss) per share – diluted ($ per share)

0.44

0.52

Trailing-twelve-month (”TTM”) Cash generated from (used in) operating activities(2)

1,868

611

TTM Cash generated from (used in) operating activities per share(2)

10.99

3.97

Cash generated from (used in) operating activities

521

341

Cash generated from (used in) operating activities per share(2)

2.97

2.19

(1) Total of segments measure. See “Total of Segments Measures” section of this news release.

(2) Supplementary financial measure. “Supplementary Financial Measures” section of this news release.

Q2 2023 Conference Call and Webcast Details

Parkland will host a webcast and conference call on Friday, August 4, 2023 at 6:30 am MDT (8:30 am EDT) to discuss the results. To listen to the live webcast and watch the presentation, please use the following link: https://app.webinar.net/XDpG4K6kMy5

Analysts and investors interested in participating in the question and answer session of the conference call may do so by calling 1-888-390-0546 (toll-free) (Conference ID: 77390959). International participants may call 1-800-389-0704 (toll-free) (Conference ID: 77390959).

Please connect and log in approximately 10 minutes before the beginning of the call. The webcast will be available for replay two hours after the conference call ends at the link above. It will remain available for one year and will also be posted to www.parkland.ca.

MD&A and Consolidated Financial Statements

The management’s discussion and analysis for the three and six months ended June 30, 2023 (the “Q2 2023 MD&A”) and consolidated financial statements for the three and six months ended June 30, 2023 (the “Q2 2023 Consolidated Financial Statements”) provide a detailed explanation of Parkland’s operating results for the three and six months ended June 30, 2023. An English version of these documents will be available online at www.parkland.ca and SEDAR after the results are released by newswire under Parkland’s profile at www.sedarplus.ca. The French versions of the Q2 2023 MD&A and the Q2 2023 Consolidated Financial Statements will be posted to www.parkland.ca and SEDAR as soon as they become available.

About Parkland Corporation

Parkland is an international fuel distributor and retailer with operations in twenty-five countries. Our purpose is to power what moves people, and every day, we provide over one million customers with the essential fuels, convenience items and quality foods on which they depend.

With approximately 4,000 retail and commercial locations across Canada, the United States, and the Caribbean region, we have developed supply, distribution, and trading capabilities to accelerate growth and business performance. In addition to meeting our customers’ needs for essential fuels, we provide a range of choices to help them lower their environmental impact. These include carbon and renewables trading, solar power, renewables manufacturing and ultrafast Electric Vehicle charging.

Our proven business model is centered around organic growth, our supply advantage, driven by scale and our integrated refinery and supply infrastructure, acquiring prudently, and integrating successfully. Our strategy is focused on developing our existing business in resilient markets, growing our food, convenience, and renewable energy businesses, and helping customers to decarbonize. Our business is underpinned by our people, and our values; safety, integrity, community, and respect, which are deeply embedded across our organization.

Forward-Looking Statements

Certain statements contained in this news release constitute forward-looking information and statements (collectively, “forward-looking statements”). When used in this news release the words “expect”, “will”, “could”, “would”, “believe”, “continue”, “pursue” and similar expressions are intended to identify forward-looking statements. In particular, this news release contains forward-looking statements with respect to, among other things: Parkland’s business model, objectives and strategies, including its ambition to reach $2 billion of Adjusted EBITDA by 2025 without further acquisitions, reduce leverage and improve shareholder returns and Parkland’s expectation of delivering at the higher end of its 2023 Adjusted EBITDA guidance.

These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. No assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this news release should not be unduly relied upon. These forward-looking statements speak only as of the date of this news release. Parkland does not undertake any obligations to publicly update or revise any forward-looking statements except as required by securities law. Actual results could differ materially from those anticipated in these forward-looking statements as a result of numerous risks, assumptions and uncertainties including, but not limited to: general economic, market and business conditions, including the duration and impact of the COVID-19 pandemic and the Russia-Ukraine conflict; micro and macroeconomic trends and conditions, including increases in interest rates, inflation and commodity prices; Parkland’s ability to execute its business objectives, projects and strategies, including the completion, financing and timing thereof, realizing the benefits therefrom and meeting our targets and commitments relating thereto; Parkland’s management systems and programs and risk management strategy; the competitive environment of our industry; retail pricing, margins and refining crack spreads; availability and pricing of petroleum product supply; volatility of crude oil and refined product prices; ability of suppliers to meet commitments; actions by governmental authorities and other regulators including but not limited to increases in taxes or restricted access to markets; environmental impact; changes in environmental and regulatory laws, including the ability to obtain or maintain required permits; and other factors, many of which are beyond the control of Parkland. In addition, the key material assumptions underlying the 2023 Adjusted EBITDA Guidance Range include: an increase in the retail fuel and petroleum product volumes by approximately 10% as compared to the year ended December 31, 2022, reflecting the full year contribution of 2022 acquisitions, integration and synergy capture, and organic growth initiatives; Food, convenience and other gross margin of approximately 30% of total retail gross margin and approximately 20% of total commercial gross margin; Refining adjusted gross margin of approximately $40 per barrel and average Burnaby Refinery utilization of between 75% and 85% based on the Burnaby Refinery’s crude processing capacity of 55,000 barrels per day; and an approximate $100 million Adjusted EBITDA impact as a result of 2023 refinery turnaround and maintenance capital expenditure of approximately $100 million relating thereto. The key material assumptions underlying the 2025 Adjusted EBITDA Ambition include an estimated $150 million of synergies and cost efficiencies and $180 million of organic growth compared to 2022 actuals. See also the risks and uncertainties described in “Cautionary Statement Regarding Forward-Looking Information” and “Risk Factors” included in Parkland’s most recent Annual Information Form, and in “Forward-Looking Information” and “Risk Factors” included in the Q2 2023 MD&A, each filed on SEDAR and available on the Parkland website at www.parkland.ca. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.

Non-Financial Measures

Parkland uses a number of non-financial measures, including composite utilization and total recordable injury frequency rate, in measuring the success of our strategic objectives and to set variable compensation targets for employees. These non-financial measures are not accounting measures, do not have comparable International Financial Reporting Standards (”IFRS”) measures, and may not be comparable to similar measures presented by other issuers, as other issuers may calculate these metrics differently. See Section 16 of the Q2 2023 MD&A, which is incorporated by reference into this news release, for further details on the non-financial measures used by Parkland.

Specified Financial Measures

This news release contains total of segments measures, non-GAAP financial measures and non-GAAP financial ratios, supplementary financial measures and capital management measures (collectively, “specified financial measures”). Parkland’s management uses certain specified financial measures to analyze the operating and financial performance, leverage, and liquidity of the business. These specified financial measures do not have any standardized meaning under IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. The specified financial measures should not be considered in isolation or used in substitute for measures of performance prepared in accordance with IFRS. See Section 16 of the Q2 2023 MD&A, which is incorporated by reference into this news release, for further details regarding specified financial measures used by Parkland.

Non-GAAP Financial Measures and Ratios

Adjusted earnings (loss) is a non-GAAP financial measure and Adjusted earnings (loss) per share is a non-GAAP financial ratio, each representing the underlying core operating performance of business activities of Parkland at a consolidated level.

Adjusted earnings (loss) and Adjusted earnings (loss) per share represent how well Parkland’s operational business is performing, while considering depreciation and amortization, interest on leases and long-term debt, accretion and other finance costs, and income taxes. The Company uses these measures because it believes that Adjusted earnings (loss) and Adjusted earnings (loss) per share are useful for management and investors in assessing the Company’s overall performance as they exclude certain significant items that are not reflective of the Company’s underlying business operations.

Adjusted earnings (loss) excludes costs that are not considered representative of Parkland’s underlying core operating performance including: (i) costs related to potential and completed acquisitions, (ii) non-core acquisition and integration employee costs, (iii) business integration and restructuring costs, (iv) changes in the fair value of share-based compensation liabilities, (v) unrealized gains and losses on (a) foreign exchange, (b) risk management assets and liabilities unless they relate to underlying physical sales activity in the current period and (c) derivatives, (vi) adjustments to foreign exchange gains and losses as a result of cash pooling arrangements and refinancing activities, (vii) realized foreign exchange gains and losses on accrued financing costs in foreign currency and the offsetting realized risk management gains and losses on the related foreign exchange risk management instruments, (viii) changes in values of the Sol Put Option, Redemption Options, environmental liabilities and asset retirement obligations, (ix) loss on inventory write-downs for which there are offsetting associated risk management derivatives with unrealized gains, (x) impairments of non-current assets, (xi) loss on modification of long-term debt, (xii) earnings impact from hyperinflation accounting, (xiii) certain realized gains and losses on risk management assets and liabilities that are related to underlying physical sales activity in another period, (xiv) gains and losses on asset disposals, (xv) adjustment for the effect of market-based performance conditions for equity settled share-based award settlements, and (xvi) other adjusting items. Parkland’s Adjusted earnings (loss) and Adjusted earnings (loss) per share are also adjusted to include Parkland’s proportionate share of its joint-venture investees’ Adjusted earnings (loss). Concurrently with Parkland entering into the Share Exchange Agreement, effective August 4, 2022, Parkland does not allocate a portion of Adjusted earnings (loss) to NCI and includes 100 percent of International results as Adjusted earnings (loss).

Please see below for the reconciliation of Adjusted earnings (loss) to net earnings (loss) and calculation of Adjusted earnings (loss) per share.

Three months ended June 30,

($ millions, unless otherwise stated)

2023

2022

Net earnings (loss) attributable to Parkland

78

81

Add: Net earnings (loss) attributable to NCI

10

Net earnings (loss)

78

91

Add:

Acquisition, integration and other costs

39

18

Loss on modification of long-term debt

2

(Gain) loss on foreign exchange – unrealized

27

(6)

(Gain) loss on risk management and other – unrealized

(11)

20

Other (gains) and losses

14

60

Other adjusting items(1)

1

4

Tax normalization(2)

(18)

(12)

Adjusted earnings (loss) including NCI

130

177

Less: Adjusted earnings (loss) attributable to NCI

11

Adjusted earnings (loss)

130

166

Weighted average number of common shares (million shares)(3)

176

156

Weighted average number of common shares adjusted for the effects of dilution (million shares)(3)

178

157

Adjusted earnings (loss) per share ($ per share)

Basic

0.74

1.07

Diluted

0.73

1.06

(1)

Other adjusting Items for the three months ended June 30, 2023 include: (i) the share of depreciation and income taxes for Isla joint venture of $3 million (2022 – $3 million); (ii) other income of $2 million (2022 – $1 million expense); (iii) customer finance income of $1 million (2022 – nil); (iv) realized risk management gain related to underlying physical sales activity in another period of $4 million (2022 – nil); and (v) adjustment to foreign exchange gains and losses related to cash pooling arrangements of $1 million (2022 – $2 million).

(2)

The tax normalization adjustment was applied to net earnings (loss) adjusting items that were considered temporary differences, such as acquisition, integration and other costs, unrealized foreign exchange gains and losses, unrealized gains and losses on risk management and other, gains and losses on asset disposals, changes in fair value of redemption options, changes in estimates of environmental provisions, loss on inventory write-downs for which there are offsetting associated risk management derivatives with unrealized gains, impairments of non-current assets and debt modifications. The tax impact was estimated using the effective tax rates applicable to jurisdictions where the related items occur.

(3)

Weighted average number of common shares are calculated in accordance with Parkland’s accounting policy contained in Note 2 of the Annual Consolidated Financial Statements.

Food and Company C-Store SSSG refers to the period-over-period sales growth generated by retail food and convenience stores at the same company sites. The effects of opening and closing stores, temporary closures (including closures for ON the RUN / Marché Express conversions), expansions of stores, renovations of stores, and stores with changes in food service models in the period are excluded to derive a comparable same-store metric. Same-store sales growth is a metric commonly used in the retail industry that provides meaningful information to investors in assessing the health and strength of Parkland’s brands and retail network, which ultimately impacts financial performance. Food and Company C-Store SSSG does not have any standardized meaning prescribed under IFRS and is therefore unlikely to be comparable to similar measures presented by other companies. Please see below for a reconciliation of convenience store revenue (Food and C-Store revenue) of the Canada segment with the Food and Company C-Store same store sales (”SSS”) and calculation of the Food and Company C-Store SSSG.

Three months ended June 30,

($ millions)

2023

2022

%(1)

Food and Company C-Store revenue

79

102

Add:

Point-of-sale (”POS”) value of goods and services sold at Food and Company C-Store operated by retailers and franchisees(2)

316

256

Less:

Rental and royalty income from retailers, franchisees and others(3)

(64)

(52)

Same Store revenue adjustments(4) (excluding cigarettes)

(34)

(16)

Food and Company C-Store same-store sales

297

290

2.5 %

Less:

Same Store revenue adjustments(4) (cigarettes)

(104)

(103)

Food and Company C-Store same-store sales (excluding cigarettes)

193

187

3.1 %

Three months ended June 30,

($ millions)

2022

2021

%(1)

Food and Company C-Store revenue

102

103

Add:

POS value of goods and services sold at Food and Company C-Store operated by retailers(2)

256

155

Less:

Rental income from retailers and others(3)

(36)

(28)

Same Store revenue adjustments(4)(5) (excluding cigarettes)

(124)

(14)

Food and Company C-Store same-store sales

198

216

(8.2) %

Less:

Same Store revenue adjustments(4)(5) (cigarettes)

(96)

(113)

Food and Company C-Store same-store sales (excluding cigarettes)

102

103

(0.6) %

(1)

Percentages are calculated based on actual amounts and are impacted by rounding.

(2)

POS values used to calculate Food and Company C-Store SSSG are not a Parkland financial measure and do not form part of Parkland’s consolidated financial statements as Parkland earns rental income from retailers in the form of a percentage rent on convenience store sales. POS values are calculated based on the information obtained from Parkland’s POS systems at retail sites, including transactional data, such as sales, costs and volumes which are subject to internal controls over financial reporting. We also use this data to calculate rental income from retailers in the form of a percentage rent on convenience store sales, which is recorded as revenue in our consolidated financial statements.

(3)

Includes rental income from retailers in the form of a percentage rent on Food and Company C-Store sales, royalty, franchisee fees and excludes revenues from automated teller machine, POS system licensing fees, and other.

(4)

This adjustment excludes the effects of acquisitions, opening and closing stores, temporary closures (including closures for ON the RUN / Marché Express conversions), expansions of stores, renovations of stores, and stores with changes in food service models, to derive a comparable same-store metric.

(5)

Excludes sales from acquisitions completed within the year as these will not impact the metric until after the completion of one year of the acquisitions when the sales or volume generated establish the baseline for these metrics.

The non-GAAP financial measures and ratios should not be considered in isolation or used in substitute for measures of performance prepared in accordance with IFRS. Except as otherwise indicated, these non-GAAP measures and ratios are calculated and disclosed on a consistent basis from period to period. See Section 16 of the Q2 2023 MD&A, which is incorporated by reference into this news release, for further details regarding Parkland’s non-GAAP financial measures and ratios.

Supplementary Financial Measures

Parkland uses a number of supplementary financial measures, including cash generated from (used in) operating activities per share, and liquidity available to evaluate the success of our strategic objectives and to set variable compensation targets for employees. These measures may not be comparable to similar measures presented by other issuers, as other issuers may calculate these metrics differently. See Section 16 of the Q2 2023 MD&A, which is incorporated by reference into this news release, for further details regarding supplementary financial measures used by Parkland.

Capital Management Measures

Parkland’s primary capital management measure is the Leverage Ratio, which is used internally by key management personnel to monitor Parkland’s overall financial strength, capital structure flexibility, and ability to service debt and meet current and future commitments. The Leverage Ratio is calculated as a ratio of Leverage Debt to Leverage EBITDA (each as defined in the Q2 2023 Consolidated Financial Statements) and does not have any standardized meaning prescribed under IFRS. It is therefore unlikely to be comparable to similar measures presented by other companies. See Section 16 of the Q2 2023 MD&A, which is incorporated by reference into this news release, for further details regarding capital management measures used by Parkland.

Total of Segments Measures

Adjusted EBITDA is a total of segments measure used by the chief operating decision maker to make decisions about resource allocation to the segment and to assess its performance. In accordance with IFRS, adjustments and eliminations made in preparing an entity’s financial statements and allocations of revenue, expenses, and gains or losses shall be included in determining reported segment profit or loss only if they are included in the measure of the segment’s profit or loss that is used by the chief operating decision maker. As such, Parkland’s Adjusted EBITDA is unlikely to be comparable to similarly named measures presented by other issuers, who may calculate these measures differently. Parkland views Adjusted EBITDA as the key measure for the underlying core operating performance of business segment activities at an operational level. Adjusted EBITDA is used by management to set targets for Parkland (including annual guidance and variable compensation targets) and is used to determine Parkland’s ability to service debt, finance capital expenditures and provide for dividend payments to shareholders. See Section 16 of the Q2 2023 MD&A, which is incorporated by reference into this news release, for further details regarding total of segments measures used by Parkland. Refer to the table below for the reconciliation of Adjusted EBITDA to net earnings (loss) for the three months ended June 30, 2023 and June 30, 2022.

Three months ended June 30,

($ millions)

2023

2022

Adjusted EBITDA attributable to Parkland (”Adjusted EBITDA”)

470

450

Add: Attributable to NCI

28

Adjusted EBITDA including NCI

470

478

Less/(add):

Acquisition, integration and other costs

39

18

Depreciation and amortization

206

174

Finance costs

98

80

(Gain) loss on foreign exchange – unrealized

27

(6)

(Gain) loss on risk management and other – unrealized

(11)

20

Other (gains) and losses(1)

14

60

Other adjusting items(2)

1

4

Income tax expense (recovery)

18

37

Net earnings (loss)

78

91

Net earnings (loss) attributable to Parkland

78

81

Net earnings (loss) attributable to NCI

10

(1)

Other (gains) and losses for the three months ended June 30, 2023 include the following: (i) $5 million non-cash valuation loss (2022 – $16 million loss) due to the change in fair value of redemption options; and (ii) $9 million loss (2022 – $44 million loss) in Other items, including (a) nil non-cash valuation gain (2022 – $44 million loss) due to the change in redemption value of Sol Put Option and (b) $1 million loss (2022 – nil) in write-off of certain assets related to renewable diesel complex. Refer to Note 12 of the Interim Condensed Consolidated Financial Statements.

(2)

Other adjusting Items for the three months ended June 30, 2023 mainly include: (i) the share of depreciation and income taxes for Isla joint venture of $3 million (2022 – $3 million); (ii) other income of $2 million (2022 – $1 million expense); (iii) customer finance income of $1 million (2022 – nil); (iv) realized risk management gain related to underlying physical sales activity in another period of $4 million (2022 – nil); and (v) realized gain on foreign exchange related to cash pooling arrangements of $1 million (2022 – $2 million loss).

Parkland uses Adjusted gross margin as a measure of segment profit (loss) to analyze the performance of sale and purchase transactions and performance on margin. Adjusted gross margin excludes the effects of significant items of income and expenditure that are not considered representative of Parkland’s underlying core margin performance and may have an impact on the quality of margins, such as (i) unrealized gains and losses on (a) foreign exchange, (b) risk management and other unless underlying physical sales activity has occurred, (ii) loss on inventory write-downs for which there are offsetting associated risk management and other with unrealized gains, (iii) certain realized gains and losses on risk management assets and liabilities that are related to underlying physical sales activity in another period, and (iv) other adjusting items. Refer to the table below for a detailed calculation of Adjusted gross margin for the three months ended June 30, 2023 and June 30, 2022

Three months ended June 30,

($ millions)

2023

2022

Sales and operating revenue

7,819

9,715

Cost of purchases

(6,873)

(8,561)

Gain (loss) on risk management and other – realized

20

(197)

Gain (loss) on foreign exchange – realized

2

(10)

Other adjusting items to Adjusted gross margin (1)

(5)

2

Adjusted gross margin

963

949

Fuel and petroleum product adjusted gross margin

775

785

Convenience and other non-fuel adjusted gross margin

188

164

Adjusted gross margin

963

949

(1)

Other adjusting items to Adjusted gross margin for the three months ended June 30, 2023 include (i) realized risk management gain related to underlying physical sales activity in another period of $4 million (2022 – nil); and (ii) realized gain on foreign exchange related to cash pooling arrangements of $1 million (2022 – $2 million loss).

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Parkland grows U.S. retail business by over 90 percent with acquisition in the rapidly growing South Florida region

CALGARY, AB, Nov. 3, 2021 /PRNewswire-HISPANIC PR WIRE/ – Parkland Corporation (”Parkland”, “we”, “our”, or “the Company”) (TSX: PKI) is pleased to announce that through its wholly owned U.S. subsidiaries (collectively, “Parkland USA”), it has entered into an agreement to acquire substantially all of the assets of Urbieta Oil Co. and certain of its affiliates (collectively, “Urbieta”). This acquisition complements Parkland’s existing Florida commercial business by establishing a large retail and convenience growth platform with high quality real estate in Miami.

Parkland Logo

“This acquisition advances our growth strategy to increase our convenience retail presence in a region where we have had success with fuel supply and commercial operations,” said Doug Haugh, President of Parkland USA. “Adding the Urbieta stores nearly doubles our U.S. retail business, provides immediate scale in a resilient, fast-growing market, and creates opportunity to meet customers’ needs through our ON the RUN convenience brand”.

Family owned and operated since 1974, Urbieta is a well-established retail, convenience, and fuel distribution business with 2020 annual fuel sales of approximately 465 million litres. Urbieta’s operations are concentrated in the Miami market. The transaction includes 94 retail locations including the real estate purchase of 54 strategic sites.

“In addition to adding an exceptional team, this acquisition provides a springboard for growth in the Southern Florida market with close proximity to our Caribbean business,” added Haugh. “The fragmented U.S. market presents a long runway of consolidation opportunities for Parkland to build scale, and better serve our customers. We will remain disciplined in our appraisal of the opportunities we see in front of us.”

The valuation metrics of this transaction reflect Urbieta’s scale, significant retail weighting and the purchase of strategic real estate. Gross profit from the acquired assets is split approximately 85 percent retail and 15 percent commercial and wholesale operations. 90 percent of the transaction consideration will be funded out of existing credit facility capacity, and the remaining 10 percent with Parkland common shares issued from treasury. The transaction is subject to customary closing conditions and is expected to close in the fourth quarter of 2021.

Forward-Looking Statements

Certain statements contained in this news release constitute forward-looking information and statements (collectively, “forward-looking statements”). When used in this news release the words “expect”, “will”, “could”, “would”, “believe”, “continue”, “pursue” and similar expressions are intended to identify forward-looking statements. In particular, this news release contains forward-looking statements with respect to, among other things, the successful completion of the acquisition of Urbieta and the timing thereof; expected benefits of the acquisition, increasing retail and convenience presence in the market, Parkland’s ability to add value to the acquired network through its expanded ON the RUN brand, consolidation opportunities for Parkland, the expected gross profit split amongst the segments of the business, and the anticipated funding of the acquisition.

These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. No assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this news release should not be unduly relied upon. These forward-looking statements speak only as of the date of this news release. Parkland does not undertake any obligations to publicly update or revise any forward-looking statements except as may be required by securities law. Actual results could differ materially from those anticipated in these forward-looking statements as a result of numerous risks and uncertainties including, but not limited to, failure to complete this acquisition; failure to satisfy the conditions to closing of the acquisition, including approval by the U.S. Federal Trade Commission and Department of Justice; failure to realize all or any of the anticipated benefits of the acquisition; general economic, market and business conditions; competitive action by other companies; refining and marketing margins; the ability of suppliers to meet commitments; actions by governmental authorities and other regulators including but not limited to increases in taxes or restricted access to markets; changes and developments in environmental and other regulations; and other factors, many of which are beyond the control of Parkland. See also the risks and uncertainties described in “Forward-Looking Information” and “Risk Factors” included in Parkland’s Annual Information Form dated March 5, 2021, and “Forward-Looking Information” and “Risk Factors” included in the Q3 2021 MD&A dated November 2, 2021 and the Q4 2020 MD&A dated March 4, 2021, each filed on SEDAR and available on the Parkland website at www.parkland.ca. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.

About Parkland

Parkland is a leading convenience store operator and independent supplier and marketer of fuel and petroleum products. Parkland services customers across Canada, the United States, the Caribbean region and the Americas through three channels: Retail, Commercial and Wholesale. Parkland optimizes its fuel supply across these three channels by operating and leveraging a growing portfolio of supply relationships and storage infrastructure. Parkland provides trusted and locally relevant fuel brands and convenience store offerings in the communities it serves.

Parkland creates value for shareholders by focusing on its proven strategy of growing organically, realizing a supply advantage and acquiring prudently and integrating successfully. At the core of our strategy are our people, as well as our values of safety, integrity, community and respect, which are embraced across our organization.

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Parkland announces date of 2021 Third Quarter Results and opens registration for its 2021 Investor Day

CALGARY AB, Oct. 14, 2021 /PRNewswire-HISPANIC PR WIRE/ – Parkland Corporation (”Parkland”, “we”, the “Company”, or “our”) (TSX: PKI) expects to announce its 2021 third quarter results after markets close on Tuesday, November 2, 2021. A conference call and webcast will then be held at 6:30 a.m. MDT (8:30 a.m. EDT) on Wednesday, November 3, 2021, to discuss the results.

Parkland Logo

To listen to the live webcast and watch the presentation, please use the following link:

https://produceredition.webcasts.com/starthere.jsp?ei=1502999&tp_key=0713d330d0

Analysts and institutional investors interested in participating in the question-and-answer session of the conference call may do so by calling 1-888-390-0546 (toll-free) (Conference ID: 88891002). International participants can call 1-587-880-2171 (toll) (Conference ID: 88891002).

Please connect and log in approximately 10 minutes before the beginning of the call. The webcast will be available for replay two hours after the conference call ends at the link above. It will remain available for one year and will also be posted to www.parkland.ca.

Financial Statements and Management’s Discussion and Analysis will be posted to www.parkland.ca and SEDAR after the results are released.

2021 Investor Day – Registration is open

Parkland will host its 2021 Investor Day presentation on November 16, 2021 at 7:00 a.m. MDT (9:00 a.m. EDT). The event will be held at the Fairmont Royal York in Toronto, Ontario and simultaneously webcast with video for those unable to attend in person.

To ensure a safe and engaging in-person event, we will be following Ontario’s COVID-19 protocols, which include showing proof of vaccination, wearing face masks when not consuming food, and physical distancing.

Analysts and investors who wish to attend the event, either in person or remotely, are invited to register using the following link: https://parkland.fluid.events/ParklandInvestorDay

The event will include presentations from Parkland’s leadership team on our long-term growth and energy transition strategy, capital allocation and financial outlook.

About Parkland

Parkland is a leading convenience store operator and independent supplier and marketer of fuel and petroleum products. Parkland services customers across Canada, the United States, the Caribbean region and the Americas through three channels: Retail, Commercial and Wholesale. Parkland optimizes its fuel supply across these three channels by operating and leveraging a growing portfolio of supply relationships and storage infrastructure. Parkland provides trusted and locally relevant fuel brands and convenience store offerings in the communities it serves.

Parkland creates value for shareholders by focusing on its proven strategy of growing organically, realizing a supply advantage and acquiring prudently and integrating successfully. At the core of our strategy are our people, as well as our values of safety, integrity, community and respect, which are embraced across our organization.

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Parkland Announces Closing of Senior Unsecured Notes Offering

CaribPR Wire, CALGARY, Alberta, April 13, 2021: Parkland Corporation (“Parkland”) (TSX:PKI) announced today the closing of its previously announced private offering (the “offering”) of US$800 million aggregate principal amount of 4.500% senior unsecured notes due 2029 (the “notes”).

Parkland will use the net proceeds of the offering to redeem all of its 6.000% senior notes due 2026 in the aggregate principal amount of US$500 million, to redeem the remaining C$200 million of its 5.625% senior notes due 2025 in the aggregate principal amount of C$500 million not already called for redemption and repay certain amounts outstanding under its revolving bank credit facility.

The notes were offered and sold only to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the U.S. Securities Act of 1933, as amended (the “Securities Act”) and offered and sold outside the United States to a non-U.S. person pursuant to Regulation S under the Securities Act. The notes have not been registered under the Securities Act or any state securities laws, and unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. This news release shall not constitute an offer to sell or the solicitation of an offer to buy any of these notes, except as required by law, nor shall there be any offer or sale of the notes in any state, or jurisdiction in which such offer, solicitation, or sale would be unlawful. This news release is neither an offer to purchase nor a solicitation of an offer to sell any of the 6.000% senior notes due 2026 or the 5.625% senior notes due 2025 and this press release shall not constitute a notice of redemption in respect therefor.

Forward-Looking Statements

Certain statements contained in this news release constitute forward-looking information and statements (collectively, “forward -looking statements”). When used in this news release the words “may”, “will”, “would” and similar expressions are intended to identify forward-looking statements. In particular, this news release contains forward-looking statements with respect to the use of proceeds from the offering, the redemption of the 6.000% senior notes and the 5.625% senior notes and the repayment of certain amounts outstanding under Parkland’s revolving bank credit facility.

No assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this news release should not be unduly relied upon. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. See the risks and uncertainties described in “Forward-Looking Information” and “Risk Factors” included in Parkland’s Annual Information Form dated March 5, 2021 and in “Forward-Looking Information” and “Risk Factors” in the management’s discussion and analysis for the year ended December 31, 2020, dated March 4, 2021, which are filed on SEDAR and available on the Parkland website at www.parkland.ca. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.

About Parkland Corporation

Parkland is an independent supplier and marketer of fuel and petroleum products and a leading convenience store operator. Parkland services customers across Canada, the United States, the Caribbean region and the Americas through three channels: Retail, Commercial and Wholesale. Parkland optimizes its fuel supply across these three channels by operating and leveraging a growing portfolio of supply relationships and storage infrastructure. Parkland provides trusted and locally relevant fuel brands and convenience store offerings in the communities it serves.

Parkland creates value for shareholders by focusing on its proven strategy of growing organically, realizing a supply advantage and acquiring prudently and integrating successfully. At the core of our strategy are our people, as well as our values of safety, integrity, community and respect, which are embraced across our organization.

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