(Source: Business Wire)
Western Refining, Inc. (NYSE:WNR) today reported net earnings of $58.9 million, or $0.86 per diluted share, for the first quarter ended March 31, 2009, versus a net loss of $40.4 million, or $0.60 per diluted share, for the same period in 2008.
The increase in earnings for the three months ended March 31, 2009, compared to the same period in 2008, was primarily due to stronger refining margins. The higher margins were the result of improved market conditions and a reduction in the cost of the Company's crude oil, primarily the result of processing a lower-cost, heavier crude oil slate.
For the three months ended March 31, 2009, Western generated cash flow from operations of $96.8 million. As of March 31, 2009, there were no cash borrowings outstanding under the Company's revolving credit facility, and since that date, the Company has not made any cash borrowings.
Paul Foster, Western's Chief Executive Officer, said, "We are pleased with our first quarter results. This was one of the most profitable first quarters in the history of our company. Our earnings growth reflects the operational improvements we have made as well as strong refining margins in January and February."
"We are taking a number of actions to continue this momentum," Foster continued. "In addition to raising sour crude throughput, the recent start-up of our gasoline hydrotreater unit at the El Paso refinery also gives us the capability to increase our production of Phoenix grade gasoline from approximately 12,000 barrels per day to in excess of 20,000 barrels per day. Historically, Phoenix has been one of our best markets in terms of both product demand and gross margin.
"In the past year, we have significantly improved our refining operations. The improvements we made have positioned us to process a wide range of crude oils and intermediate feedstocks at our refineries. This flexibility should contribute to continued earnings and cash flow growth in the future."
Commenting on current market conditions, Foster said, "As we begin the spring and summer driving season, we are cautiously optimistic in our outlook for margins as a result of inventory draws, increased gasoline demand, and continued low refinery utilization rates. In our southwest market, several refineries will be undergoing major maintenance turnarounds in the second quarter. Additionally, as we approach the summer paving season, asphalt margins at the El Paso refinery are significantly better this year than last year."
Conference Call Information
A conference call is scheduled for May 6, 2009, at 10:00 a.m. ET to discuss Western's financial results. The call can be accessed at Western's website, www.wnr.com. The call can also be heard by dialing (888) 713-4218, passcode: 51270382. The audio replay will be available through May 20, 2009, by dialing (888) 286-8010, passcode: 77009672.
A copy of this press release, together with the reconciliations of certain non-GAAP financial measures contained herein, can be accessed on the investor relations menu on Western's website, www.wnr.com.
About Western Refining
Western Refining, Inc. is an independent refining and marketing company headquartered in El Paso, Texas. Western has a refinery in El Paso, two refineries in the Four Corners region of northern New Mexico and a refinery in Yorktown, Virginia. Western's asset portfolio also includes refined products terminals in Albuquerque, New Mexico and Flagstaff, Arizona, asphalt terminals in Phoenix and Tucson, Arizona, Albuquerque and El Paso, retail service stations and convenience stores in Arizona, Colorado and New Mexico, a fleet of crude oil and finished product truck transports, and wholesale petroleum products operations in Arizona, California, Colorado, Nevada, New Mexico, Texas and Utah. More information about the Company is available at www.wnr.com.
Cautionary Statement on Forward-Looking Statements
This press release contains forward-looking statements. The forward-looking statements contained herein include statements about the actions we are taking to continue the momentum we have experienced in the first quarter, our ability to increase our production of Phoenix grade gasoline, our ability to process a wider range of crude oil and intermediate feedstocks at our refineries, operational improvements at our refineries, and our expectations of future earnings and cash flow growth, and margins for our products. These statements are subject to the general risks inherent in our business. Our expectations may or may not be realized. Some of our expectations may be based upon assumptions or judgments that prove to be incorrect. In addition, Western's business and operations involve numerous risks and uncertainties, many of which are beyond Western's control, which could result in Western's expectations not being realized or otherwise materially affect Western's financial condition, results of operations and cash flows. Additional information relating to the uncertainties affecting Western's business is contained in its filings with the Securities and Exchange Commission. The forward-looking statements are only as of the date made, and Western does not undertake any obligation to (and expressly disclaims any obligation to) update any forward looking statements to reflect events or circumstances after the date such statements were made, or to reflect the occurrence of unanticipated events.
Consolidated Financial Data The following tables set forth our summary of historical financial and operating data for the periods indicated below: Three Months Ended March 31, 2009 2008 (In thousands, except per share data) Statement of Operations Data: Net sales $ 1,368,198 $ 2,551,071 Operating costs and expenses: Cost of products sold (exclusive of depreciation and amortization) 1,046,615 2,402,846 Direct operating expenses (exclusive of depreciation and amortization) 133,538 132,921 Selling, general, and administrative expenses 35,018 29,558 Maintenance turnaround expense 104 955 Depreciation and amortization 34,240 25,597 Total operating costs and expenses 1,249,515 2,591,877 Operating income (loss) 118,683 (40,806 ) Interest income 143 571 Interest expense (27,055 ) (18,564 ) Amortization of loan fees (1,554 ) (825 ) Loss from derivative activities (1,216 ) (2,481 ) Other income (expense) 922 992 Income (loss) before income taxes 89,923 (61,113 ) Provision for income taxes (30,995 ) 20,712 Net income (loss) $ 58,928 $ (40,401 ) Basic earnings per share $ 0.86 $ (0.60 ) Dilutive earnings per share $ 0.86 $ (0.60 ) Weighted average basic shares outstanding 67,817 67,580 Weighted average dilutive shares outstanding 67,826 67,580 Cash Flow Data: Net cash provided by (used in): Operating activities $ 96,840 $ 68,642 Investing activities (38,655 ) (70,553 ) Financing activities (63,773 ) (247,328 ) Other Data: Adjusted EBITDA (1) $ 141,921 $ (15,172 ) Capital expenditures 38,655 70,553 Balance Sheet Data (at end of period): Cash and cash equivalents $ 74,229 $ 40,326 Working capital 335,666 283,686 Total assets 3,099,651 3,346,742 Total debt 1,277,250 1,343,250 Stockholders' equity 870,713 704,743 (1) Adjusted EBITDA represents earnings before interest expense, income tax expense, amortization of loan fees, depreciation, amortization, maintenance turnaround expense and lower of cost or market, or LCM, inventory reserve adjustment. However, Adjusted EBITDA is not a recognized measurement under GAAP. Our management believes that the presentation of Adjusted EBITDA is useful to investors because it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. In addition, our management believes that Adjusted EBITDA is useful in evaluating our operating performance compared to that of other companies in our industry because the calculation of Adjusted EBITDA generally eliminates the effects of financings, income taxes and the accounting effects of significant turnaround activities (which many of our competitors capitalize and thereby exclude from their measures of EBITDA) and acquisitions, items that may vary for different companies for reasons unrelated to overall operating performance. -------------------------------------------------------------------------------
Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:
Adjusted EBITDA does not reflect our cash expenditures or future requirements for significant turnaround activities, capital expenditures, or contractual commitments;
Adjusted EBITDA does not reflect the interest expense or the cash requirements necessary to service interest or principal payments on our debt;
Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; and
our calculation of Adjusted EBITDA may differ from the Adjusted EBITDA calculations of other companies in our industry, thereby limiting its usefulness as a comparative measure.
Because of these limitations, Adjusted EBITDA should not be considered a measure of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA only supplementally. The following table reconciles net income (loss) to Adjusted EBITDA for the periods presented:
Exception caught in main.
Refining Segment The following table presents the segment financial data for our refining group, including other revenues and expenses not specific to a particular refinery: Three Months Ended March 31, 2009 2008 (In thousands, except per barrel data) A service of YellowBrix, Inc.
