Declares Quarterly Cash Dividend
Company schedules conference call for November 6, 2008 at 10:00 A.M. Eastern
DALLAS, Nov. 5 /PRNewswire-FirstCall/ -- Alon USA Energy, Inc. (NYSE: ALJ)
('Alon') today announced results for the quarter and nine months ended
September 30, 2008. Net income for the third quarter of 2008 was $37.3 million,
or $0.80 per share, compared to net income of $12.6 million, or $0.27 per
share, for the same period last year. Excluding special items, Alon recorded
net income of $24.3 million, or $0.52 per share, for the third quarter of 2008,
compared to net income of $11.9 million, or $0.26 per share, for the same
period last year.
Net income for the nine months ended September 30, 2008, was $21.9 million,
or $0.47 per share, compared to net income of $143.8 million, or $3.08 per
share, for the same period last year. Excluding special items, Alon recorded a
net loss of ($60.6) million, or ($1.30) per share, for the nine months ended
September 30, 2008, compared to net income of $141.0 million, or $3.02 per
share, for the same period last year.
Jeff Morris, Alon's President and CEO, commented, 'We successfully
completed the acquisition of the Krotz Springs, Louisiana refinery this
quarter. With the completion of the acquisition, our crude oil refining
capacity increased by 50% to approximately 250,000 barrels per day ('bpd'),
including four refineries located on the West Coast, West Texas and Gulf Coast.
I am also pleased that we have completed work on the Fluid Catalytic Cracking
Unit ('FCCU') at our Big Spring refinery that was damaged in the February 18,
2008 fire. With the completion of this work, we were able to restart the FCCU
and return to our normal operating capabilities. We are grateful for the
support of our insurers who have already advanced us $280 million to date.
'At our California refineries, we optimized our refining economics during
the third quarter of 2008, lowering throughput rates to balance production
with demand for our asphalt products. We also faced challenges during the
quarter at our Krotz Springs refinery with hurricanes Gustav and Ike. These
hurricanes caused minimal damage to the refinery, but disrupted crude supply
receipts into the refinery and product movements from the refinery while power
was being restored to the area.
'I am very pleased with the $0.52 earnings per share excluding special
items in the third quarter of 2008 considering the utilization of the Big
Spring refinery was at 53% and the Krotz Springs refinery was impacted by the
hurricanes.'
THIRD QUARTER 2008
Special items for the third quarter of 2008 included an after-tax gain of
$60.3 million recognized from the involuntary conversion of assets due to the
Big Spring refinery fire. An after-tax loss of $35.8 million was recorded in
the third quarter related to inventories adjustments that occurred due to the
Krotz Springs refinery acquisition. Also, $10.2 million of after-tax losses
were incurred for costs associated with the Big Spring refinery fire. Special
items for the third quarters of 2008 and 2007 also included an after-tax loss
of $1.3 million and after-tax gain of $0.7 million, respectively, recognized
on disposition of assets.
Refinery operating margin at the Big Spring refinery was $8.17 while
operating only in a hydroskimming mode for the third quarter of 2008 compared
to $9.40 for the same period in 2007. This decrease resulted primarily from
lower refinery light product yields as a result of the fire at the Big Spring
refinery which was partially offset by higher industry Gulf Coast 3-2-1 crack
spreads. Light product yields were approximately 54% and 79% for the third
quarter of 2008 and 2007, respectively. Refinery operating margin at the
California refineries was $9.13 for the third quarter of 2008 compared to
$0.82 for the same period in 2007. The Krotz Springs refinery operating
margin for the third quarter of 2008 was $7.20 excluding the effects of
inventories adjustments recorded as part of the acquisition.
The combined refineries throughput for the third quarter of 2008 averaged
122,252 bpd, consisting of 35,204 bpd at the Big Spring refinery, 28,661 bpd
at the California refineries, and 58,387 bpd at the Krotz Springs refinery
compared to a combined average of 134,608 bpd in the third quarter of 2007,
consisting of 67,824 bpd at the Big Spring refinery and 66,784 bpd at the
California refineries. The Big Spring refinery had lower throughput as a
result of the February 18, 2008 fire. Throughput at the California refineries
was reduced to optimize our refining and asphalt economics. The Krotz Springs
refinery throughput was adversely affected by electrical outages and reduced
crude supply due to hurricanes Gustav and Ike.
Gulf Coast 3-2-1 average crack spreads increased to $16.05 per barrel for
the third quarter of 2008 compared to $13.14 per barrel for the third quarter
of 2007. West Coast 3-2-1 average crack spreads decreased to $14.68 per barrel
for the third quarter of 2008 compared to $20.50 per barrel for the third
quarter of 2007. The WTI/WTS crude oil differentials for the third quarter of
2008 decreased to $2.16 per barrel compared to $5.26 per barrel in the same
period of 2007.
Asphalt margins for the third quarter of 2008 increased to an average of
$80.30 per ton compared to $15.67 per ton for the third quarter of 2007. This
increase resulted primarily from a 79% increase in sales prices which were
$613.98 per ton for the third quarter of 2008 compared to $342.17 per ton for
the same period in 2007, as asphalt prices increased to more closely coincide
with crude prices.
YEAR-TO-DATE 2008
Special items for the nine months ended September 30, 2008 and 2007
included $26.3 million and $2.8 million, respectively, of after-tax gains
recognized primarily from the disposition of assets in connection with the
contribution of certain product pipelines and terminals to Holly Energy
Partners, LP, in March 2005. Special items recognized for the nine months
ended September 30, 2008 also included the previously mentioned $35.8 million
after-tax loss associated with inventories acquired in the Krotz Springs
refinery acquisition in addition to after-tax gain of $117.5 million
associated with the involuntary conversion of assets due to the Big Spring
refinery fire and $25.5 million of after-tax losses associated with the fire.
Refinery operating margin at the Big Spring refinery was $2.30, while
operating primarily in a hydroskimming mode for the nine months ended
September 30, 2008, compared to $15.81 for the same period in 2007. This
decrease resulted from both lower refinery light product yields as a result of
the fire at the Big Spring refinery as well as lower industry Gulf Coast 3-2-1
crack spreads. Light product yields were approximately 62% and 82% for the
nine months ended September 30, 2008 and 2007, respectively. Refinery
operating margin at the California refineries was a negative ($0.37) for the
nine months ended September 30, 2008 compared to $5.11 for the same period in
2007. The California refineries operating margin was adversely affected by
higher crude oil cost during 2008.
The combined refineries throughput for the nine months ended September 30,
2008, excluding the Krotz Springs refinery acquired in July 2008, averaged
66,919 bpd, consisting of 32,299 bpd at the Big Spring refinery and 34,620 bpd
at the California refineries compared to a combined average of 131,770 bpd,
consisting of 68,654 bpd at the Big Spring refinery and 63,116 bpd at the
California refineries for the same period last year. The Big Spring refinery
had lower throughput due to the fire. Throughput at the California refineries
was reduced to optimize our refining and asphalt economics.
Gulf Coast 3-2-1 average crack spreads decreased to $12.82 per barrel for
the nine months ended September 30, 2008, compared to $17.38 per barrel for
the same period in 2007. West Coast 3-2-1 average crack spreads decreased to
$18.15 per barrel for the nine months ended September 30, 2008 compared to
$30.89 per barrel for the nine months ended September 30, 2007. The WTI/WTS
crude oil differentials for the first nine months of 2008 decreased to $3.81
per barrel compared to $4.61 per barrel in the same period of 2007.
Asphalt margins increased to an average of $54.83 per ton for the nine
months ended September 30, 2008, compared to $35.09 per ton for the same
period of 2007. This increase resulted primarily from a 51% increase in sales
prices which were $497.50 per ton for the first nine months of 2008 compared
to $330.40 per ton for the same period in 2007.
Alon also announced today that its Board of Directors has approved the
regular quarterly cash dividend of $0.04 per share. The dividend is payable
on December 12, 2008 to shareholders of record as of November 28, 2008.
The Company has scheduled a conference call for Thursday, November 6, 2008,
at 10:00 a.m. Eastern, to discuss the third quarter 2008 results. To access
the call, please dial 800-240-6709, or 303-262-2054, for international callers,
and ask for the Alon USA Energy call at least 10 minutes prior to the start
time. Investors may also listen to the conference live on the Alon corporate
website, http://www.alonusa.com, by logging onto that site and clicking
'Investors'. A telephonic replay of the conference call will be available
through November 20, 2008, and may be accessed by calling 800-405-2236, or
303-590-3000, for international callers, and using the passcode 11120481. A
web cast archive will also be available at http://www.alonusa.com shortly
after the call and will be accessible for approximately 90 days. For more
information, please contact Donna Washburn at DRG&E at 713-529-6600 or email
dmw@drg-e.com.
Alon USA Energy, Inc., headquartered in Dallas, Texas, is an independent
refiner and marketer of petroleum products, operating primarily in the South
Central, Southwestern and Western regions of the United States. The Company
owns four crude oil refineries in Texas, California, Louisiana and Oregon,
with an aggregate crude oil throughput capacity of approximately 250,000
barrels per day. Alon markets gasoline and diesel products under the FINA
brand name and is a leading producer of asphalt. Alon also operates more than
300 convenience stores primarily in West Texas and New Mexico substantially
under the 7-Eleven and FINA brand names and supplies motor fuels to these
stores primarily from its Big Spring refinery. In addition, Alon supplies
approximately 800 additional FINA branded stations.
Any statements in this press release that are not statements of historical
fact are forward-looking statements. Forward-looking statements reflect our
current expectations regarding future events, results or outcomes. These
expectations may or may not be realized. Some of these expectations may be
based upon assumptions or judgments that prove to be incorrect. In addition,
our business and operations involve numerous risks and uncertainties, many of
which are beyond our control, which could result in our expectations not being
realized or otherwise materially affect our financial condition, results of
operations and cash flows. Additional information regarding these and other
risks is contained in our filings with the Securities and Exchange Commission.
Contacts: Claire A. Hart, Senior Vice President
Alon USA Energy, Inc.
972-367-3649
Investors: Jack Lascar/Sheila Stuewe
DRG&E / 713-529-6600
Media: Blake Lewis
Lewis Public Relations
214-635-3020
Ruth Sheetrit
SMG Public Relations
011-972-547-555551
-Tables to follow-
ALON USA ENERGY, INC.
