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Alon's C-store Division Fires on All Cylinders

DALLAS -- Tremendous public feedback over Alon USA Energy Inc.'s completed conversion from the FINA brand to the ALON banner at its convenience stores has made the retail division a shining star within the overall company.

According to Paul Eisman, Alon USA's president and CEO, fuel sales were up 8 percent in its fiscal third quarter ended Sept. 30  vs. the same timeframe in 2011. Merchandise sales rose 3 percent during the same time period.

"This business continues to deliver strong results," Eisman said during the company's earnings call today.

More specifically, Alon USA's retail division earned $400 million in net sales in its latest quarter, compared to $383 million in its 2011 fiscal third quarter.

Merchandise sales increased to $82 million in Alon's latest quarter, vs. $79 million in last year’s Q3. Also a positive for Alon USA was that the improved results came from fewer stores. As of Sept. 30, 2011, Alon USA had 303 stores. Now, the company has 299 stores.

Its retail division profits were one factor that propelled Alon USA to much improved earnings in this third quarter. The company overall achieved a net profit of $43.2 million, compared to a profit of $28.6 million during the same quarter last year.

"We are pleased with our third-quarter results and the positive impact these results are having on our balance sheet," relayed Eisman.

Also a positive, according to Eisman, is the potential initial public offering (IPO) of Alon USA Partners. Alon is awaiting approval from the U.S. Securities and Exchange Commission to initiate the IPO, which would trade as a master limited partnership.

Alon USA Partners will handle the former parent company's refining and petroleum marketing businesses in the South Central and Southwest regions of the United States. Alon Energy's retail convenience store division will not be part of the planned IPO, hence remaining under the parent company, Amir Barash, Alon Energy's vice president of investor relations, confirmed earlier in an e-mail to CSNews Online.

"The IPO will strengthen and balance our company," Eisman stated during today’s earnings call. "It allows for two avenues of growth."

Not everything has been rosy at Alon USA, however. Eisman announced that the company is suspending its refinery operations in Bakersfield, Calif., due to weak demand for asphalt. The CEO indicated Alon USA will not look to sell the refinery assets. Instead, the company will look at various alternative offerings for the refinery.

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