The Pantry, Inc. (NASDAQ: PTRY), a leading independently operated convenience store chain in the southeastern U.S., today mailed to all stockholders additional materials recommending that all stockholders vote
The Pantry’s highly qualified and experienced director nominees on the
proxy card. The mailing has been filed with the Securities and Exchange Commission and is available on the Company’s website at
Selected highlights are below:
YOUR BOARD AND MANAGEMENT TEAM
ARE LEADING THE COMPANY FORWARD
With 1,538 stores in 13 states, The Pantry is the
fourth largest independently operated convenience store retailer in the U.S.
Our footprint is concentrated in southeastern markets with high population growth, giving us
significant upside potential
as a leader in these regions.
OVER THE LAST TWO YEARS, THE PANTRY’S BOARD AND MANAGEMENT TEAM HAVE IMPLEMENTED MEANINGFUL CHANGES TO POSITION THE COMPANY FOR SUSTAINED, PROFITABLE GROWTH.
The Board of Directors remains committed to providing oversight and empowering the company’s management team to continue delivering results and creating value for all stockholders
- Brought in new CEO, Dennis Hatchell, in 2012 to lead the Company
- Attracted leading talent to The Pantry to further strengthen the senior leadership team
- Reduced debt through continued discipline around capital expenditures and strong free cash flow
- Completed a strategic and in-depth operational review supported by a globally recognized consulting firm to identify key areas of focus to create meaningful stockholder value
- Increased same-store sales through a more effective merchandise mix
- Initiated a significant remodel program to enhance store base and strengthen brand
- Utilized new store opportunities and acquisitions to accelerate growth and strengthen The Pantry’s competitive position in key markets
VOTE FOR THE CONTINUED SUCCESS OF A PROFITABLE QSR STRATEGY
Your Board and management team are focused on
enhancing store growth and profitability through continued build-out of Quick-Service Restaurants (QSRs)
Our successes so far include:
- Strong relationships with top-tier franchisors such as Subway
- Our new partnership with Little Caesars: five locations opened, three in construction and 10 more approved
- Opened eight new QSRs in 2013 with more than 20 QSR build-outs planned for 2014
- 223 QSRs in operation today, with over 500 additional sites identified for potential QSR expansion
Your Board and management team have a deep understanding of the significant QSR opportunities ahead. We have studied QSR market dynamics carefully, and know that the optimal strategy for success is not an “urgent build plan” but a measured expansion with our top-tier QSR partners, taking into account market availability, brand popularity, construction costs, and other startup expenses.
We are currently targeting 20 new QSRs in 2014 and 40-50 new QSRs per year thereafter, and continue to pursue this opportunity in a thoughtful way that will best enhance stockholder value.
VOTE FOR A CLEAR STRATEGY TO ENHANCE FUEL PERFORMANCE
VOTE FOR A DISCIPLINED CAPITAL ALLOCATION POLICY
- Despite the competitive marketplace, approximately 75% of our market is made up of small chains or single stores, allowing us to leverage our significant scale
- Our strategy is to stabilize, then regain gallon market share
- Improvement in market share will not be at the expense of profitability
- Recently implemented state-of-the-art technology and cost management tools to optimize fuel pricing and minimize volatility
- Installed electronic fuel price signs in nearly 1,000 stores, with plans to add 150 more in fiscal 2014
- Utilizing technology and analytics to realize early success from several initiatives underway in test markets
- The current Board and management team have been deliberate and careful in implementing changes to our fuel strategy, given the significant competition in the marketplace
The Pantry has generated strong free cash flow year-after-year by prudently managing capital expenditures during periods of transition and ramping up investments in projects in periods of growth. The resulting strong free cash flow has allowed us
to reduce total debt by $368 million, or 28%, since 2008
. Today, with a new leadership team that is
committed to maintaining rigorous cost discipline
, we are pursuing selective opportunities that will strengthen the Company’s position in leader markets and enhance free cash flow.
YOUR BOARD IS ALWAYS INTERESTED IN ADDING NEW MEMBERS WITH RELEVANT KNOWLEDGE AND EXPERTISE, AND HAS RECENTLY TAKEN PROACTIVE STEPS TO EXPAND ITS RANKS.
appointed in May 2013: