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SANFORD, N.C. -- The Pantry Inc., which operates 1,361 convenience stores in 10 southeastern states, announced financial results for its fourth fiscal quarter and year ended Sept. 30, 2004. The quarter and year included 14 and 53 weeks, respectively, one more week than the comparable periods in fiscal 2003.
Total revenues for the fourth quarter of fiscal 2004 were $1.03 billion, a 40.9 percent increase from $733.8 million in last year's fourth quarter. Net income more than doubled to $13.0 million from $6.3 million a year ago. Diluted earnings per share were 63 cents, a 90.9 percent increase from 33 cents in the fourth quarter of fiscal 2003.
Management estimates that the extra week in fiscal 2004 added approximately 5 cents to earnings per share. The results also include approximately $2.3 million of net losses from uninsured property losses from the four major hurricanes during the quarter, net of gains on real estate transactions. For the full fiscal year, excluding financing-related items discussed below, net income was $33.6 million, or $1.63 per share, up sharply from 91 cents (on a comparable basis) in fiscal 2003.
President and CEO Peter J. Sodini said, "We are pleased to have achieved the high end of our recent guidance range despite the hurricanes and the challenging environment we faced throughout the year in the gasoline market. This performance reflects continued strong performance of our core stores along with the benefits from our Golden Gallon acquisition in October 2003, and the refinancing of virtually all our debt in the second fiscal quarter of 2004."
Merchandise revenues for the quarter rose 23.1 percent from a year ago, and were up 3.8 percent on a comparable-store basis. Merchandise gross margin declined to 35.6 percent, compared with 37.2 percent a year ago, in part due to changes in cigarette vendor promotions and LIFO charges in the respective quarters. Total merchandise gross profits were $117.5 million, up 17.9 percent from a year ago.
For the full fiscal year, comparable store merchandise revenues increased 3.4 percent, while total merchandise gross profit rose 16.4 percent on a 10 basis-point improvement in the gross margin to 36.3 percent.
Comparable-store gasoline gallons for the quarter increased 2.0 percent from a year ago, with total gallons sold up 25.6 percent. Gasoline revenues rose 51.1 percent, in part reflecting a 20.5 percent increase in the average retail price per gallon, to $1.82. The gross margin per gallon was 12 cents, matching the margin a year ago. Gasoline gross profit for the quarter totaled $46.3 million, a 25.4 percent increase from last year's fourth quarter. For the full fiscal year, comparable store gasoline gallons rose 2 percent and total gasoline gross profit increased 13.9 percent. The gasoline margin per gallon for the year was 12.0 cents, compared with 12.4 cents in fiscal 2003.
Sodini commented, "Our store-level operations turned in another solid performance in fiscal 2004. Comparable store merchandise revenues and gasoline gallons -- as well as gross margins in both areas -- met our objectives. The results were particularly gratifying on the gasoline side, given the pressure from rising costs in that market over the year. We believe our ongoing store rebranding and reimaging programs are helping to sustain the momentum; at year-end, 575 of the approximately 1,100 targeted stores had been completed and we expect the remainder to be completed by the end of calendar 2005."
Net income for fiscal 2004 was $17.6 million, or $0.85 per diluted share, compared with net income before cumulative effect of change in accounting principle of $15.0 million, or $0.82 per share, in fiscal 2003.
The Pantry operates c-stores under the Kangaroo Express, The Pantry, Golden Gallon and Lil Champ Food Store brands.