Susser Holdings Corporation (SUSS)

SUSS 
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Susser Holdings Corporation (SUSS)

2013 Consumer & Retail Conference

March 12, 2013 2:00 pm ET

Executives

Mary E. Sullivan - Chief Financial Officer, Principal Accounting Officer, Executive Vice President and Treasurer

Steven C. DeSutter - Executive Vice President, Chief Executive Officer of Retail Operations and President of Retail Operations

Rocky B. Dewbre - Executive Vice President, President of Wholesale and Chief Operating Officer of Wholesale

Analysts

Kelly A. Bania - BofA Merrill Lynch, Research Division

Presentation

Kelly A. Bania - BofA Merrill Lynch, Research Division

And we're going to go ahead and get started here. I'm pleased to have the pleasure of introducing Susser Holdings this afternoon, which, in case you missed it, Susser now actually operates as 2 companies, really, a retail company and a wholesale company. And the wholesale company has just been restructured as MLP. So I'm sure we're going to hear more about that. But we have with us Mary Sullivan who's the CFO actually of both companies, I believe; and then, Steve DeSutter, the President and CEO of the Retail Division; and Rocky Dewbre, the President and COO of the Wholesale Division. So Mary, I'm just going to go turn it over to you and look forward to some Q&A to follow up.

Mary E. Sullivan

Thank you, Kelly. Good afternoon, everyone. Thanks for being here with us. We're a third-generation family-led business. Our headquarters for both the corporate office and the retail company's in Corpus Christi, Texas, and our wholesale division is headquartered in Houston.

Our roots go back 75 years in the fuel distribution business, and we've changed quite a bit since then. Today, we think of ourselves as selling convenience. I'm going to start off by saying don't think of us as a typical gas station that you might see up here. We've got a few pictures up here of some of our new stores. Stripes is our proprietary brand for our convenience stores. You see that they're larger than what you might be used to up here in this area. One nice thing about those large stores is we can incorporate our fresh food program, which we call Laredo Taco Company, that's currently in about 63% of our stores. Steve will talk about it a little bit in more detail, but it is wonderfully delicious, it's spicy and it's good value, so our customers love it.

We also have a network of independent operators of convenient stores that buy fuel from us under long-term contracts. So example is the Chevron station you see up here on the top left would be one of our dealer-operated stores.

So our network currently is about 1,140 stores. That would be 600 Stripes stores. We just opened 1 yesterday, and 353 now have that restaurant offering inside of them. We have over 580 branded convenient stores that are in our dealer network. So again, they're buying their fuel from us under long-term contracts, but they're operating the actual convenience store side of the business. And additionally, we have over 1,600 active commercial customers, which buy fuel from us. This could be municipalities. It's unbranded convenient stores, it's businesses, it's anybody that has a tank on their property that they buy fuel from -- by the tank load when they need it.

We think of ourselves as almost $1 billion of merchandise and $1.4 billion of gasoline every year of motor fuel, even though our revenues are approaching $6 billion.

Our EBITDA last year was $183 million. When we went public in 2006, our goal, as we told investors, is we wanted to double our EBITDA over the next 5 years, but we not only exceeded that. We've actually more than tripled our EBITDA over the last 6 years, so very proud of that.

We're also very proud of our record of growing our same-store sales by -- same-store merchandise sales every year for the past 24 years. We think it's imperative that you're growing that top line because you know you're going to have the inflation in the middle of your P&L.

We are very much a growth company, we have been and we still think of ourselves that way. We grow in 3 ways: First, we want to grow same-store sales every year. Second, we want to build new big-box retail stores every year, like the ones we've been doing. We, so far, have built over 145 of those. And occasionally, we're going to make a selective acquisition. Now, in our retail business, most of that company was built through acquisition, but now that we've continued to improve our portfolio, we're going to be pretty selective on what we buy because we want it to be accretive, not only financially but operationally. We have done 13 acquisitions over the last 24 years. Four of those doubled the size of the company, so we're certainly not afraid of a big deal, but our company is also pretty adept at managing that change.

We have grown through acquisition and through organic growth, both our revenues and our cash flow, over the 12 years you see here by a compound annual growth rate of 20%. And it would also be 20% if I'd done this graph on a 15- or 20-year basis.

So our footprint today covers 4 states in the fast-growing Southwest, and we're grateful to be so heavily positioned in Texas. It's certainly one of the reasons for the strong performance of our company. So here, we've got the red diamonds are our retail locations, and then the blue dots are our wholesale locations. These are the contracted dealer locations.

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