If you've done much driving in the Southeast, you've probably stopped and shopped at a Pantry Inc. (NASDAQ:PTRY) gas station/convenience store -- quite possibly without even realizing it. But investors in the company -- one of the nation's leading convenience chains with nearly 1,300 stores in 10 states -- probably don't mind. The stock has skyrocketed in 2003, crushing the S&P 500.

Pantry operates stores under its own name, but also several others including Handy Way, Lil Champ, Quick Stop and more. Revenues come mostly from gasoline, along with merchandise -- largely tobacco, beer, wine, and packaged drinks. Fast food is also available in many outlets, where chains such as Krystal, CKE Restaurants' (NYSE:CKR) Hardee's and Subway set up shop. More than half the merchandise is bought from Berkshire Hathaway (NYSE:BRK.A) subsidiary McLane.

The business has performed well this fiscal year, which ended on September 25. Early yesterday Pantry pre-announced full-year financial results, pointing investors toward strong year-over-year net income and EBITDA growth. (Full results are scheduled for a November 13 release.)

In-depth financial information and same-store sales data aren't available in yesterday's release, but the financials for previous quarters shed a little light on what's happening at Pantry. The company has managed to grow its gasoline, merchandise and commission (read: lottery) sales, which has in turn led to higher gross and operating profits. Higher same-store sales have helped results as well.

Meanwhile, management continues to make meaningful business decisions, including refinancing debt, consolidating its gasoline brand partners, and reconfiguring the presentation, pricing and mix of its non-gas merchandise. Pantry has also closed several underperforming stores.

In August, management announced plans to buy the 138-store Golden Gallon chain, which will boost its presence in Tennessee and Georgia (as well as revenues).

Investors should continue to watch the debt situation at Pantry as the company grows. If the company grows net income by boosting gross and operating margins as it adds more stores, its cash performance should eventually support its improvements on the income statement.

To make sure that the debt situation stays in hand, keep a close eye on the interest coverage ratio, which compares EBIT to interest expense.