SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
|X|Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 31, 1996, or
|_|Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _______________ to _______________
Commission File No. 1-9510
FFP PARTNERS, L.P.
(Exact name of registrant as specified in its charter)
Delaware 75-2147570
(State or other jurisdiction of (I.R.S. employer
incorporation or organization identification number)
2801 Glenda Avenue; Fort Worth, Texas 76117-4391
(Address of principal executive office, including zip code)
817/838-4700
(Registrant's telephone number, including area code)
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
Class A Units 3,442,872
Class B Units 235,000
(Number of units outstanding as of May 13, 1996)
<PAGE>
FFP PARTNERS, L.P., AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
March 31, 1996 December 31, 1995
ASSETS
Current Assets -
Cash $8,170 $8,106
Receivables, including current
portion of noncurrent notes
receivable 14,527 10,329
Inventories 10,816 11,260
Prepaid expenses and other 581 615
Total Current Assets 34,094 30,310
Property and equipment, net of accumulated
depreciation 31,714 31,872
Noncurrent notes receivable, excluding current
portion 1,389 1,156
Claims for reimbursement of environmental
remediation costs 1,335 1,255
Other assets, net 4,364 4,739
Total Assets $72,896 $69,332
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities -
Amount due under revolving credit line $6,043 $4,003
Current installments of long-term debt 1,013 1,028
Current installments of obligation under
capital lease 974 884
Accounts payable 14,368 13,030
Money orders payable 6,705 5,918
Accrued expenses 10,292 9,894
Total Current Liabilities 39,395 34,757
Long-term debt, excluding current installments 5,816 6,157
Obligation under capital lease, excluding
current installments 975 943
Other liabilities 1,906 1,774
Total Liabilities 48,092 43,631
Partners' Equity, net of treasury units of $269 at
March 31, 1996, and December 31, 1995 24,804 25,701
Total Liabilities and Partners' Equity $72,896 $69,332
See accompanying notes to condensed consolidated financial statements.
<PAGE>
FFP PARTNERS, L.P., AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
(In thousands, except per unit data)
(Unaudited)
Three Months Ended
March 31, 1996 March 26, 1995
Revenues -
Motor fuel $77,456 $67,499
Merchandise 14,736 15,440
Miscellaneous 2,199 1,474
Total Revenues 94,391 84,413
Costs and Expenses -
Cost of motor fuel 72,879 62,279
Cost of merchandise 10,523 11,164
Direct store expenses 7,094 6,979
General and administrative expenses 2,724 2,445
Depreciation and amortization 886 958
Total Costs and Expenses 94,106 83,825
Operating Income/(Loss) 285 588
Interest expense 320 309
Income/(Loss) Before Income Taxes (35) 279
Deferred income tax expense 134 125
Net Income/(Loss) $(169) $154
Income/(Loss) allocated to -
Limited partners $(167) $152
General partner (2) 2
Net income/(loss) per Class A and Class B Unit $(0.05) $0.04
Distributions declared per Class A and Class B Unit $0.205 $0.000
Weighted average number of Class A and Class B
Units outstanding 3,671 3,607
See accompanying notes to condensed consolidated financial statements.
<PAGE>
FFP PARTNERS, L.P., AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
March 31, 1996 March 26, 1995
Cash Flows from Operating Activities -
Net income/(loss) (169) 154
Adjustments to reconcile net income to cash
provided/(used) by operating activities -
Depreciation and amortization 886 958
Deferred income tax expense 134 125
Net change in operating assets
and liabilities (1,201) 377
Net cash provided/(used) by operating
activities (350) 1,614
Cash Flows from Investing Activities -
Additions of property and equipment, net (664) (1,101)
Net cash (used) by investing activities (664) (1,101)
Cash Flows from Financing Activities -
Net borrowings/(repayments) under
credit facilities 1,806 (538)
Proceeds from exercise of unit options 33 0
Distributions to unitholders (761) 0
Net cash provided/(used) by financing
activities 1,078 (538)
Net Increase/(Decrease) in Cash 64 (25)
Cash at beginning of period 8,106 11,400
Cash at end of perid $8,170 $11,375
See accompanying notes to condensed consolidated financia statements.
<PAGE>
FFP PARTNERS, L.P., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996
(Unaudited)
1. Basis of Presentation
The condensed consolidated financial statements include the
assets, liabilities, and results of operations of FFP Partners, L.P., and its
99%-owned subsidiaries, FFP Operating Partners, L.P., Direct Fuels, L.P., and
FFP Financial Services, L.P., and its 100%-owned subsidiaries, FFP Illinois
Money Orders, Inc., Practical Tank Management, Inc., and FFP Transportation,
L.L.C., collectively referred to as the "Company."
The condensed consolidated balance sheet as of March 31, 1996,
and the consolidated income statements and condensed consolidated statements of
cash flows for the three month periods ended March 31, 1996, and March 26, 1995,
have been prepared by the Company without audit. In the opinion of management,
all adjustments, consisting only of normal recurring adjustments, necessary to
fairly present the Company's financial position as of March 31, 1996, and the
results of operations and cash flows for the three month periods ended March 31,
1996, and March 26, 1995, have been made. Interim operating results are not
necessarily indicative of results for the entire year.
The notes to the consolidated financial statements which are
included in the Company's Annual Report on Form 10-K for the year ended December
31, 1995, include accounting policies and additional information pertinent to an
understanding of these interim financial statements. That information has not
changed other than as a result of normal transactions in the three months ended
March 31, 1996.
2. Income per Unit
The Class A and Class B Units represent a 99% interest in the
Company. Accordingly, income or loss per unit is calculated by dividing 99% of
the income or loss amount by the weighted average number of units outstanding.
<PAGE>
FFP PARTNERS, L.P., AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations for First Quarter 1996 (three months ended March 31, 1996)
compared with First Quarter 1995 (three months ended March 26, 1995)
The Company's motor fuel revenues increased $9,957,000 (14.8%)
in the first quarter 1996 compared to 1995 due to a general increase fuel prices
and to a 5.8% increase in retail gallons sold and a 23.5% increase in wholesale
gallons sold. Although prices increased significantly during this period, the
Company was not able to pass on to its customers the full amount of the
increased prices with the result that motor fuel margin was $643,000 (12.3%)
less than in the prior year. The Company's retail fuel margin per gallon was 7.9
cents in 1995 as compared to 10.3 cents in 1994.
The $704,000 decline in merchandise sales is the result of a
2.4% and 1.8% decline in average weekly sales at the Company's convenience
stores and truck stops, respectively, and the operation of an average of 1.8
fewer convenience stores in the 1995 quarter as compared to 1994. The average
weekly merchandise sales decrease is related to the Company's efforts to
increase its merchandise margin, which improved to 28.6% in 1995 from 27.7% in
the year earlier period.
Miscellaneous revenues increased $725,000 (49.2%) in the 1996
period principally due to gains recognized from the sale of the merchandise
operations at certain convenience stores. In 1996 the Company sold these
operations at six stores whereas no such sales occurred in the first quarter
1995. These sales are the continuation of the Company's program, begun in the
second quarter 1995, to sell the merchandise operations at stores that it
believes will contribute more to the profitability of the Company when operated
by independent operators.
The modest increase of $115,000 (1.6%) in direct store
expenses is due principally to the increased gallons of fuel sold through the
Company's independently operated self-service fuel outlets. Although fuel
margins at these outlets declined, as discussed above, the volume of fuel sold
increased and many of these operators are compensated at a fixed rate per
gallon.
General and administrative expenses increased $279,000 (11.4%)
in the first quarter 1995 vs the 1994 period due principally to increased bad
debt expense, related to increased wholesale fuel sales and sales at the
independently operated self-service fuel outlets, and increases in professional
fees.
The 3.6% reduction in interest expense did not parallel the
reduction in debt levels because of increases in the general level of interest
rates since the Company's bank debt bears interest at floating rates.
Liquidity and Capital Resources
The Company's working capital declined by $854,000 at the end
of the first quarter from the amount at the prior year end. This decline is
attributable to the net loss incurred by the Company during the quarter, the
purchase of property and equipment, and the $309,000 reduction in long-term
debt.
However, the Company is entering its typically strongest
period of the year when revenues and cash flows generally increase. Accordingly,
although the Company has negative working capital, management believes that
internally generated funds, the Company's traditional use of trade credit, along
with its bank and lease lines of credit are such that operations can be
conducted in a customary manner.
<PAGE>
EXHIBITS AND REPORTS ON FORM 8-K
Exhibits
27 Financial Data Schedule.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities and Exchange Act of 1934, the Registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
FFP PARTNERS,L.P.
Registrant
Date: May 16, 1996 By: /s/John H. Harvison
------------------------------------------------
John H. Harvison
Chairman and
Chief Executive Officer
Date: May 16, 1996 By: /s/Steven B. Hawkins
------------------------------------------------
Steven B. Hawkins
Vice President - Finance and
Chief Financial Officer
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