Western Refining Reports 'Another Very Successful Year'


EL PASO, Texas and TEMPE, Ariz. — Western Refining Inc. had “another very successful year,” President and CEO Jeff Stevens announced Thursday during its 2015 fiscal fourth-quarter earnings call.

The chief executive cited that all business segments had a successful year, with retail operations achieving record levels in fuel volumes, merchandise sales and profitability.

As of Dec. 31, Western Refining had 258 operating retail outlets, compared to 230 in 2014. The company’s retail division consists of convenience stores operating under the GIANT, Mustang, Sundial and Howdy’s banners.

On the fuel side, Western Refining's retail operations sold 90.73 million gallons of fuel in the fourth quarter, an increase of 13 million gallons vs. the same quarter in 2014. Year over year, fuel gallons sold also saw an increase from 309.88 million gallons in 2014 to 357.83 million in 2015.

Stevens commented that fuel demand continued to be strong in the first eight weeks of 2016, and the company expects to see similar results in 2016 compared to 2015.

In regards to merchandise, retail ops sales increased significantly in the fourth quarter of 2015 to $77.64 million overall from $67 million during the year-ago period.

Same-store retail fuel sales increased 3 percent, and same-store merchandise sales increased 4 percent compared to 2014, the CEO noted. Same-store sales during the first eight weeks of 2016 were tracking at a similar level, up 5 percent. 

Companywide, Western Refining earned a net profit of $52.2 million in its fourth quarter (excluding special items), vs. a net profit of $116.8 million (excluding special items) in its 2014 fourth quarter.

Stevens said the company performed well against its 2015 goals, and he expects Western Refining will continue to carry out this optimization and growth throughout 2016.

Pending Merger With Northern Tier Energy

As CSNews Online previously reported, Western Refining submitted a bid to acquire Northern Tier Energy LP for $2.56 billion. If approved, Western Refining would add the SuperAmerica network of 165 convenience stores to its retail portfolio.

At the beginning of Thursday’s earnings call, Western Refining stressed that it could not discuss further details about the merger, as the transaction is still under Federal Trade Commission review, as of Jan. 19. Stevens said there is no exact timeline for the deal’s completion.

Similarly, Northern Tier reported at the beginning of its earnings call Thursday that it could not comment “or entertain any questions” regarding the Western Refining merger. 

Northern Tier Q4 Earnings Highlights

For its 2015 fiscal fourth quarter ended Dec. 31, Tempe, Ariz.-based Northern Tier posted a net loss of $12.6 million, vs. net income of $16 million for the fourth quarter of 2014. Full-year 2015 net income was $331 million, compared to $241.6 million for full-year 2014.

“2015 was an exceptional year for Northern Tier,” Dave Lamp, president and CEO, commented during its earnings call Thursday.

Northern Tier’s retail operating segment saw declines in the fourth quarter of 2015, reporting a net income of $3.5 million, vs. $11.8 million in the fourth quarter of 2014. On the fuel side, margins were 25 cents per gallon, vs. 30 cents per gallon for the prior-year period.

Retail adjusted EBITDA for the fourth quarter was $5.6 million, compared to $13.9 million for the year-ago period. The company noted this decrease was driven primarily by lower fuel margins and higher personnel and promotional costs.

The aggregate of fuel gallons sold at Northern Tier's company-operated retail stores, plus fuel gallons sold to franchise stores, experienced an 8.1-percent jump year over year. Northern Tier executives said this growth is primarily a result of opening three company-operated stores and establishing seven additional SuperAmerica franchise locations during the fourth quarter.

As of Dec. 31, the number of franchise locations totaled 109, compared to 89 in 2014 and 75 in 2013. The company had added one more company-operated store and four additional franchise locations so far in 2016.

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