ARKO Petroleum Corp.

Greetings and welcome to the ARCO Petroleum Corporation fourth quarter and full year 2025 financial results. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Ashley McDermott, Vice President of Financial Reporting. Please go ahead.

Thank you. Good afternoon and welcome to ARCA Petroleum Corp's fourth quarter and full year 2025 earnings conference call and webcast. On today's call are Ari Kotler, Chairman, President, and Chief Executive Officer, and Jordan Mann, Chief Financial Officer. Our earnings press release and annual report on Form 10-K for the year ended December 31st, 2025 are filed with the SEC, are available on our website at www.arcopetroleum.com. During our call today, unless otherwise stated, management will compare results to the same period in 2024. Before we begin, please note that all fourth quarter 2025 financial information is unaudited. During this call, management may make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Please review the forward-looking and cautionary statements section at the end of our fourth quarter and full year 2025 earnings press release There are various factors that could cause actual results to differ materially from forward-looking statements made during our call today. Any forward-looking statements made during this call reflect our current views with respect to future events, and ARCA Petroleum Corp. is under no obligation to update or revise forward-looking statements made on this call, whether as a result of new information, future events, or otherwise, except as required by law. On this call, management will share operating results on both a GAAP and a non-GAAP basis. Descriptions of those non-GAAP financial measures that we use, such as adjusted EBITDA, discretionary cash flow, net debt, and the ratio of net debt to adjusted EBITDA, and reconciliations of these measures to our results as reported in accordance with GAAP, are detailed in our earnings press release or in our annual report on Form 10-K for the year ended December 31, 2025. Additionally, management will share profit measures for our individual business segments along with fuel contribution, which is calculated as fuel revenue, less fuel costs, and exclude intercompany charges by our GPMP segment. And now I would like to turn the call over to Ari.

Thank you, and good afternoon, everyone. I'd like to start our call today to thank all of you for joining our first earning call since our IPO last month, and to our all investors, for their trust and support. In our IPO in February, we issued approximately 11.1 million shares of our Class A common stock at a price to the public of $18 per share. We were and continue to be excited by the interest of all of the quality investors that participated in our IPO. The market has received us nicely. In fact, on March 5th, Our underwriters exercised their over-allotment option and purchased approximately 1.5 million additional shares. The IPO was a major milestone to our unique asset-light and cash-flow-generating business model. We applied the IPO proceeds to reduce debt and strengthen an already conservative balance sheet. Our IPO has provided support for a large, growing, and profitable oil cell fuel distribution and fleet fueling business, and we have financial flexibility and we're positioned to execute. This financial flexibility is extremely important in our industry. We are one of the largest fuel distributors in North America, distributing more than 2 billion gallons in the last 12 months, And despite that size, we have a roughly only 1% market share of fuel distribution markets. The balance of the industry remains highly fragmented, providing a substantial runway for growth, and we see strategic accretive opportunities to expand our platform. To that end, we are currently in due diligence and different stages of negotiation with two targets. One target in the west-south central region would present an opportunity to add approximately 38 million gallons across approximately 110 also locations. The second in the Midwest would offer an opportunity to add approximately 350 million in annual gallons to our platform. We continue to conduct due diligence on these transactions. We are excited about these potential transactions and our team continue to look for more opportunities. On the macro environment and Q1 2026 trends, no surprise to you, but events in the Middle East during the first quarter have presented extraordinary volatility in fuel costs and higher costs than was anticipated. Events like this highlight a couple of aspects of our business model. The vast majority of our gallon souls are on a cost-plus basis, which provide margin stability in times like this. While we could see softness in volume as cost increase, I will note that our business has a bit of a counterbalance embedded within. We generally receive approximately 1.25% prompt pay discount from our supplier partners, which increases our margin as the cost of fuel increases. As it relates to our non-cost plus gallons, fleet fueling and our consignment agent locations, which represent approximately 15% of our Q4 gallons sold, volatility generally provide an opportunity to capture more margin. As we continue to monitor these macro events, our team continues to execute pricing discipline to manage margin across the platform. On the GPMP side, related to fuel distributed to retail sites operated by our parent ARCO Corp, which we refer to ARCO retail sites, we had been seeing positive same-store gallons growth before winter storms at the end of January and beginning of February created some disruption. Turning to our fourth quarter results, consistent with the preliminary results disclosed in connection with our IPO, we ended the year on a positive trajectory. adjusted EBITDA grew approximately 4% as compared to the prior year, showing improved momentum and as we ended the year. In our wholesale segment, both gallons and cents per gallon, also referred to as CPG, continued to grow in Q4, resulting in a strong quarter with an increase in fuel contribution year over year. This results showed the benefit of dealerization, which is the conversion of ARCA retail sites to dealer sites in our wholesale segment. In 2025, more than 250 sites were converted from ARCA retail sites and supplied by our GPMP segments to dealer location in our wholesale segment, bringing our total number of conversions from the beginning of the dealerization efforts in the middle of 2024 to 409. Additionally, we have approximately 120 additional sites committed either under letter of intent, under contract, or already converted since December 31st, 2025. And we expect to complete those plus additional conversion by the end of 2026. As the margin profile in our oil sales segment is typically a few cents above the margin from our sales, to the ARCO retail sites, the continued conversion of these sites should improve our contribution overall. Additionally, we benefit from rental income from our dealers as those sites are converted to dealer locations. Our fleet fueling segments perform in line with the prior year, and we are very excited about the prospects of this business. As you are aware, we are the largest card lock operator in the Mid-Atlantic states and one of the largest in the nation. We are excited about the tremendous white space in this industry. Not only that this business generates attractive cash flow with minimal labor and maintenance capex, due to industry card lock location, are relatively inexpensive to build, easy to run, and support healthy diesel margins. We have a target to build 20 new to industry locations in 2026 and have already identified and are working on 14 of these locations. On these new builds, we are targeting mid to high teens returns on $1 to $2 million investments to build per site. Combined with our focus on accretive M&A in the wholesale segment, we believe these new card lock locations will provide us with tremendous Runway for Growth. On capital allocation, we are a dividend-oriented platform while maintaining the flexibility to deploy capital for growth. To that end, in March, the APC Board declared a dividend of 26 cents per share to be paid in April, which after prorating for the period from our IPO through March 31, 2026, is consistent with an annual dividend rate of $2 per share. We view this dividend as a very attractive yield that for illustrative purposes, based on the currently anticipated dividend rate, represents 11 to 10% dividend yield at a share price of $18.50 to $19.50 per share. Consistent with the strategies I noted before, we plan to deploy capital on accretive projects such as also M&A and building our new catalog locations. We expect that our strong balance sheet and availability under our lines of credit give us ample liquidity to execute on these strategies. With that, I will turn it over to Jordan to walk through our financial results and outlook.