Good morning and welcome to the CrossAmerica Partners First Quarter 2021 Earnings Call. My name is Brandon, and I'll be your operator for today. At this time, all participants are in a listen only mode. Later we will conduct the question-and-answer session. Please note that this conference is being recorded. I will now turn the call over to Jonathan Benfield, Chief Accounting Officer . You may begin Sir.

Thank you, operator. Good morning and thank you for joining the CrossAmerica Partners first quarter 2021 earnings call. With me today are Charles Nifong, CEO and President. Charles will provide some opening comments, a brief overview of CrossAmerica's operational performance and highlights from the full year and quarter, and then I will discuss the financial results. At the end, we will open up the call to questions. I should point out that today's call will follow some presentation slides that we will utilize during this morning's event. These slides are available as part of the webcast and are posted on the CrossAmerica website. Before I begin, I would like to remind everyone that today's call including the question-and-answer session may include forward-looking statements regarding expected revenue, future plans, future operational metrics and opportunities and expectations of the organization. There can be no assurance that management's expectations, beliefs and projections will be achieved or that actual results will not differ from expectations. Please see CrossAmerica's filings with the Securities and Exchange Commission including annual reports on Form 10-K and quarterly reports on Form 10-Q for a discussion of important factors that could affect our actual results. Forward-looking statements represent the judgment of CrossAmerica's management as of today's date and the organization disclaims any intent or obligation to update any forward-looking statements. During today's call, we may also provide certain performance measures that do not conform to U.S. generally accepted accounting principles or GAAP. We have provided schedules that reconcile these non-GAAP measures with our reported results on a GAAP basis as part of our earnings press release. Today's call is being webcast and a recording of this conference call will be available on the CrossAmerica website for a period of 60 days. With that, I'll now turn the call over to Charles.

Thank you, John. I appreciate everyone joining us this morning as always. We thank you for your interest in the partnership and hope that you all we'll. During today's call, I will briefly go through some of the operating highlights for the first quarter of 2021. I will also provide some color on the recently announced agreement with 7-Eleven; the continuing impacts from COVID-19, along with a few other updates, similar to what I provided during our quarterly calls this past year. John then review in more detail, the financial results. Now, if you turn to slide four, I will briefly review some of our results. For the first quarter of 2001, our wholesale fuel volume increased 32% compared to the first quarter of 2020, largely due to the acquisitions and exchanges that were completed during 2020 offset by the impact of COVID-19. While we saw a strong increase in overall volume for the quarter relative to last year, we also saw a 19% decrease in our wholesale fuel margin per gallon year-over-year, primarily impacted by decline and our dealer tank wagon margins. Despite the decline and fuel margin per gallon, our wholesale fuel gross profit increased 7% for the quarter. As I have done in prior quarters, I'll provide some color on same-store volume performance to provide insight on business conditions. We've now been operating in dealing with COVID for over a year. And it was during March of last year that the initial society-wide shut due to COVID occurred. Basically for the first quarter of 2020, January and February were normal. And then March was coded, which was as we all appreciate, decidedly not normal. As I go through my comments on our volume performance for the quarter, keep that thought in mind, the volume environment is obviously…

Thank you, Charles. If you would please turn to slide 8, I would like to review our first quarter results for the partnership. We reported adjusted EBITDA $20.7 million for the first quarter of 2021, which was a decline of 18% when compared to the first quarter of 2020. Our distributable cash-flow for the first quarter of 2021 with $15.8 million versus $20.4 million for the first quarter of 2020, reflecting a decrease of 23% year-over-year, both adjusted EBITDA and BCF are lower primarily due to the lower variable fuel margins and higher operating in G&A expenses, Charles discussed earlier. Our distribution coverage on a pay basis for the trailing 12 months ended March 31st, 2021 was 1.2, three times a 3% improvement versus 1.19 times for the trailing 12 months ended March 31st, 2020. For the current quarter, our coverage on a paid basis was 0.7, nine times compared to 1.08 times for the first quarter of 2020. While we prefer to stay above 1.0 times coverage, even for the quarterly period, we've historically seen our coverage, the weakest in the first quarter, and it was below 1.0 times for the first quarter periods of 2014 to 2019, bouncing back above 1.0 times in the second quarter. As we do see some seasonality in our business, this is the primary reason we tend to focus on the trailing 12 month coverage ratio. We will continue to target a 1.2 to 1.3 times trailing 12 month coverage ratio. If you would turn to the next slide, slide 9, we ended the quarter with the leverage ratio as defined under our credit facility of 4.54 times, and remain in compliance with our financial covenant ratios. Leverage ratio is higher than our year-end ratio of 4.06 times because of the weaker results…

Thank you. And we will now begin the question and answer session. [Operator Instructions] and we are standing by for questions. It's from RBC, from RBC we have Elvira Scotto, please go ahead.

Hey, good morning, everyone. Couple of questions for me, can you provide any more detail around when the acquisition closes? I know you said it's sort of on a rolling basis, but can you give a little bit of a more granular timeline?

Yeah, this is Charles. So look on the closing of our acquisition is dependent upon the closing of the marathon 7-Eleven acquisition. And so, you know, if you followed what they've been saying on that most recently on the marathon conference call, they indicated that the timing for that acquisition to close was, you know, a matter of weeks and that's consistent with our understanding. So once that acquisition closes, our transaction can begin to close 60 to 90 days after that. And based on our role in close, you know, we're looking at our transaction closing over a matter of weeks from the start of that period.

Great and then in terms of how does that work in terms of number of stores? Is it, I mean, is it just you, you do one store at a time or do you do like a concept stores with the rebranding?

Yeah. So the way that we're contemplating doing is we'll be doing it in, in groups. You know, basically a week, we'll see a cluster of sites come over because as I touched on in the comments, you have to rebrand the store and then significantly with a lot of the back office equipment, we've got to take out that equipment and put in equipment so that we're hooked up with our networks and our suppliers networks. So it's not as simple as what you might see in a standard transaction or in a transaction, or you have a period of time to convert the branding over. We're doing all of this at closing, but the good thing for that is that we anticipate that in terms of the actual operations of the site, you know, we're looking at only for a few hours on the initial day of conversion where the sites will be not available to customers, but then immediately after that, that'll be back up and running.

Got it. Great, and then so the question I have is you know, with the colonial pipeline shut down, does that have any impact to your operations?

Yeah, so we obviously have assets within the footprint of the colonial, and you're basically talking about the Southeastern part of the United States. And so, you know, from our suppliers right now, we're not getting a whole lot of additional information beyond what is publicly available and that the colonial expects to resume substantially normal operations by the end of the week, I'd say right now at the moment, we are seeing certain terminals that are having supply outages but nothing widespread. And if it does resolve by the end of the week, I think that you will see things, you know, resuming back to normal and supply being back to normal within, you know, a few days after that. If it goes on longer than this weekend, then you'll start to see more disruptions. And it's not that there's a lack of supply out there it's really that the ultimate supply wants, particularly for some of the markets will be much further away. And at the moment there is a shortage of drivers in the industry, which this will exacerbate further such that you could see, you know, more severe disruptions in what we've seen today. But as of right now, it's been minimal for us. But again, we do have, we do have a pretty substantial footprint in the market, but for so far it's been manageable.

From Wells Fargo we have [indiscernible], please go ahead.

Hey, good morning. Thanks for taking the question. Could you discuss if there's a floor to where your wholesale margin could go, continue to strengthen WTI prices?

Well, so I think the way to think about our wholesale margins and, you know, we've given some information on this before, is that on the wholesale side, you know, roughly 70% of our wholesale contracts are our fixed pricing which means that really the only variability in those contracts is going to be what happens with the terms discount, which will vary with the price of crude. In this case, higher crude prices will, will boost that discount that we get and then the other 30% or so that's variable price margin, which is really going to be reflective of what happens with the rack to retail pricing. It what's the spread between the wholesale costs at the terminal and the price that people are paying at the pump itself. And so for that, you know, what we've seen here is, so since the period of, you know, basically the end of October, we've seen a, a very steady and consistent rise in prices and typically what that type of environment that really hurts our margins. And as I touched on in my comments, you know, relative to other periods where we've seen that type of price increase, our margins have done very well relative to those prior periods. So based on what other people have said for the environment and COVID, are we seeing a repricing and re expectation of where, you know, the other dealers are expecting there, you know, what their margins need to be? I don't know. All I can say is that with volumes being down, obviously people's breakevens are higher and that does seem to reflect, be reflected in pricing networks we've seen on, on the street. And so whether or not that will continue that way as volumes get more back to normal remains to be seen. But so far we've seen a relatively positive pricing environment, despite the increase in crew.

[Operator Instructions] It looks like no further questions at this time. I will now turn it to Jonathan Benfield for closing remarks.

All right. Thank you. You're listening in today and we appreciate you joining us and we look forward to talking with you again soon.

Thank you, ladies and gentlemen, this concludes today's conference. Thank you for joining. You may now disconnect.