Alon USA Energy Records 65.4 Million Net Loss for Q4
DALLAS -- While its retail gasoline business grew significantly, Alon USA Energy Inc. recorded a net loss, excluding special items, of $65.4 million for the fourth quarter of 2009, compared to net income, excluding special items, of $65.1 million, or $1.39 per share, for the same period last year.
On a GAAP basis, net loss for the fourth quarter of 2009 was $90.6 million, or $1.93 per share, compared to net income of $60.9 million, or $1.30 per share, for the same period last year. Alon reported a net loss, excluding special items, of $82.7 million, or $1.77 per share, for the full year ended Dec. 31, 2009, compared to net income, excluding special items, of $6.6 million, or $0.14 per share, for the same period the year before. On a GAAP basis, net loss for the year was $115.2 million, or $2.46 per share, compared to net income of $82.9 million, or $1.77 per share, for the year prior.
"At the end of 2009, we converted preferred stock of our Krotz Springs subsidiary into Alon common stock at a conversion price of over $14 per common share," noted Jeff Morris, Alon's CEO. "The conversion increased total stockholders' equity by approximately $106 million and in effect created a gain of approximately $55 million that is not reflected in our financial statements with a non-cash expense of approximately $21 million that is included in our financial statements."
The retail and branded marketing segment continues to show increased sales volumes over prior periods, he noted. "In our retail and branded marketing segment, retail fuel sales gallons increased by 31.4 percent from 23.9 million gallons in the fourth quarter of 2008 to 31.4 million gallons in the fourth quarter of 2009," Morris said. "Our integrated branded fuel sales increased by 6.3 percent from 61.7 million gallons in the fourth quarter of 2008 to 65.6 million gallons in the fourth quarter of 2009."
The company's credit facilities were approximately $150 million at year-end. In addition, Alon was able to obtain, with the support of its majority shareholder, a $60 million credit facility for three years to be used in its operations. Also, Alon improved its liquidity by selling two-thirds of its investment in Holly Energy Partners for approximately $23 million in January 2010.
"At year end our tax receivable was approximately $65 million and, to date, we have received refunds of approximately $31 million," Morris noted. "Even in this challenging environment we were able to maintain our net debt to total capitalization by reducing net debt during 2009 by approximately $189 million."
Alon Refining Krotz Springs successfully issued $216.5 million of senior secured notes in October 2009 and completed the exchange of substantially all these notes with publicly registered notes in February 2010. In connection with the issuance of the senior secured notes, Alon prepaid in full the outstanding obligations under the Krotz Springs term loan. "As a result, we incurred a non-cash pre-tax charge of approximately $20 million for the write-off of unamortized costs on the Krotz Springs term loan in the fourth quarter of 2009," he noted.
In January 2010, Alon started up the alkylation unit at its Big Spring refinery that had been inactive for almost two years, negatively impacting its 2009 margins on average, by approximately $1.80 per barrel or pre-tax income of approximately $40 million. The company is pursuing the purchase of the Bakersfield refinery from Big West of California LLC, a subsidiary of Flying J, Inc. as an alternative solution to convert its vacuum gas oil production into gasoline and distillate products.
The Krotz Springs refinery was shutdown in November 2009 for turnaround and capital projects work and is expected to be back in operation in April 2010.
"The silver lining is that our management has been through down cycles before and we are beginning to see reasons to be optimistic about the end of this down cycle," Morris said. "In 2009 the strategy of Alon has become even more clear to us and we have become keenly focused on the heavy duty fleet. We believed before we made the investments in Paramount and Krotz Springs that demand of fuels for the heavy duty fleet, primarily distillates, would exceed demand for the light duty fleet, primarily gasoline."
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On a GAAP basis, net loss for the fourth quarter of 2009 was $90.6 million, or $1.93 per share, compared to net income of $60.9 million, or $1.30 per share, for the same period last year. Alon reported a net loss, excluding special items, of $82.7 million, or $1.77 per share, for the full year ended Dec. 31, 2009, compared to net income, excluding special items, of $6.6 million, or $0.14 per share, for the same period the year before. On a GAAP basis, net loss for the year was $115.2 million, or $2.46 per share, compared to net income of $82.9 million, or $1.77 per share, for the year prior.
"At the end of 2009, we converted preferred stock of our Krotz Springs subsidiary into Alon common stock at a conversion price of over $14 per common share," noted Jeff Morris, Alon's CEO. "The conversion increased total stockholders' equity by approximately $106 million and in effect created a gain of approximately $55 million that is not reflected in our financial statements with a non-cash expense of approximately $21 million that is included in our financial statements."
The retail and branded marketing segment continues to show increased sales volumes over prior periods, he noted. "In our retail and branded marketing segment, retail fuel sales gallons increased by 31.4 percent from 23.9 million gallons in the fourth quarter of 2008 to 31.4 million gallons in the fourth quarter of 2009," Morris said. "Our integrated branded fuel sales increased by 6.3 percent from 61.7 million gallons in the fourth quarter of 2008 to 65.6 million gallons in the fourth quarter of 2009."
The company's credit facilities were approximately $150 million at year-end. In addition, Alon was able to obtain, with the support of its majority shareholder, a $60 million credit facility for three years to be used in its operations. Also, Alon improved its liquidity by selling two-thirds of its investment in Holly Energy Partners for approximately $23 million in January 2010.
"At year end our tax receivable was approximately $65 million and, to date, we have received refunds of approximately $31 million," Morris noted. "Even in this challenging environment we were able to maintain our net debt to total capitalization by reducing net debt during 2009 by approximately $189 million."
Alon Refining Krotz Springs successfully issued $216.5 million of senior secured notes in October 2009 and completed the exchange of substantially all these notes with publicly registered notes in February 2010. In connection with the issuance of the senior secured notes, Alon prepaid in full the outstanding obligations under the Krotz Springs term loan. "As a result, we incurred a non-cash pre-tax charge of approximately $20 million for the write-off of unamortized costs on the Krotz Springs term loan in the fourth quarter of 2009," he noted.
In January 2010, Alon started up the alkylation unit at its Big Spring refinery that had been inactive for almost two years, negatively impacting its 2009 margins on average, by approximately $1.80 per barrel or pre-tax income of approximately $40 million. The company is pursuing the purchase of the Bakersfield refinery from Big West of California LLC, a subsidiary of Flying J, Inc. as an alternative solution to convert its vacuum gas oil production into gasoline and distillate products.
The Krotz Springs refinery was shutdown in November 2009 for turnaround and capital projects work and is expected to be back in operation in April 2010.
"The silver lining is that our management has been through down cycles before and we are beginning to see reasons to be optimistic about the end of this down cycle," Morris said. "In 2009 the strategy of Alon has become even more clear to us and we have become keenly focused on the heavy duty fleet. We believed before we made the investments in Paramount and Krotz Springs that demand of fuels for the heavy duty fleet, primarily distillates, would exceed demand for the light duty fleet, primarily gasoline."
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