Alon USA Reports First Quarter Results Increases Quarterly Cash Dividend and Declares Special Dividend

Company schedules conference call for May 9, 2013 at 11:30 a.m. Eastern

DALLAS, May 8, 2013 /PRNewswire/ -- Alon USA Energy, Inc. (NYSE: ALJ) ("Alon") today announced results for the first quarter of 2013. Net income for the first quarter of 2013 was $54.2 million, or $0.86 per share, compared to net loss of $(29.4) million, or $(0.52) per share, for the same period last year. Excluding special items, Alon recorded net income of $54.2 million, or $0.86 per share, for the first quarter of 2013, compared to net income of $8.5 million, or $0.15 per share, for the same period last year.

Paul Eisman, CEO and President, commented, "We continue to profit from the strategic operational decisions that improve our crude slate at our refineries as evidenced by our adjusted EBITDA of $157 million for the quarter and adjusted EBITDA for the last twelve months of $524 million. Also, we had net income of $74 million before non-controlling interest for the quarter.  We achieved these results despite reduced refinery throughput rates resulting from maintenance at both Big Spring and Krotz Springs during the quarter. During the first quarter, we made additional progress towards our goal of strengthening our balance sheet by reducing net debt an additional $137 million to $334 million. At the end of the first quarter our net debt to total capitalization was 32% and net debt to adjusted EBITDA for the last twelve months was 0.6:1 compared to 70% and 3.7:1 for the same periods last year.

"During the first quarter, we generated very favorable margins of $28.76 per barrel at our Big Spring refinery, benefiting from the strong margin environment as well as the WTI less WTS differentials. At Krotz Springs, we generated an operating margin of $13.14 per barrel as we were able to take greater advantage of cheaper WTI priced crudes.

"In California, as mentioned last quarter, we are continuing our engineering study at our Bakersfield refinery location. Concurrently, we are monitoring the progress of the submitted permit applications that would allow us to ship via rail lighter mid-continent crudes to replace the heavier West Coast crudes used in the California system. We still expect to receive these permits, as well as to complete required infrastructure build out and to enter into the required supply arrangements, during the fourth quarter of this year. In the meantime, we have signed agreements with major companies to utilize our logistical assets.

"For the second quarter of 2013, we expect the average throughput at the Big Spring refinery to be approximately 72,000 barrels per day and only 57,000 barrels per day at the Krotz Springs refinery due to repairs being performed on the reformer unit. At Krotz Springs, we are planning to process 30,000 barrels per day of WTI during the second quarter of 2013. In addition, we are in the process of completing a railcar unloading terminal facility at the Krotz Springs refinery with plans to ship an additional 6,000 barrels per day of WTI crude oil with our existing railcars."

FIRST QUARTER 2013

There were no material special items that affected earnings for the first quarter of 2013. Special items reduced earnings by $37.8 million for the first quarter of 2012 which primarily included after-tax losses of $27.2 million associated with losses on commodity swaps, $4.9 million associated with heating oil call option crack spread contracts, $5.8 million associated with the write-off of unamortized original issuance discount due to the repayment of the Alon Brands term loan offset by $0.1 million associated with gain recognized on disposition of assets.

The combined refinery throughput for the first quarter of 2013 averaged 117,915 barrels per day ("bpd"), consisting of 59,476 bpd at the Big Spring refinery and 58,439 bpd at the Krotz Springs refinery, compared to 135,190 bpd for the first quarter of 2012, consisting of 69,512 bpd at the Big Spring refinery and 65,678 bpd at the Krotz Springs refinery. The lower throughput rates for the first quarter of 2013 were due to maintenance work at both refineries.

Refinery operating margin at the Big Spring refinery was $28.76 per barrel for the first quarter of 2013 compared to $15.24 per barrel for the same period in 2012. This increase is mainly due to higher Gulf Coast 3/2/1 crack spreads and a widening WTI to WTS spread. The Krotz Springs refinery operating margin was $13.14 per barrel for the first quarter of 2013 compared to $5.81 per barrel for the same period in 2012. This increase is mainly due to the higher utilization of lower crude oil costs with the addition of WTI priced crude oils.

The average Gulf Coast 3/2/1 crack spread for the first quarter of 2013 was $28.40 per barrel compared to $24.78 per barrel for the same period in 2012. The average Gulf Coast 2/1/1 high sulfur diesel crack spread for the first quarter of 2013 was $8.20 per barrel compared to $12.46 per barrel for the same period in 2012.

The average WTI to WTS spread for the first quarter of 2013 was $11.41 per barrel compared to $2.16 per barrel for the same period in 2012. The average LLS to WTI spread for the first quarter of 2013 was $20.22 per barrel compared to $12.61 per barrel for the same period in 2012.

Asphalt margins for the first quarter of 2013 were $61.51 per ton compared to $55.18 per ton for same period in 2012. On a cash basis (i.e. excluding inventory effects), asphalt margins in the first quarter of 2013 were $61.44 per ton compared to $3.01 per ton in the first quarter of 2012. The average blended asphalt sales price decreased 5.6% from $572.54 per ton in the first quarter of 2012 to $540.48 per ton in the first quarter of 2013 and the average non-blended asphalt sales price increased 14.7% from $341.49 per ton in the first quarter of 2012 to $391.77 per ton in the first quarter of 2013.

Retail fuel sales volume increased by 7.5% from 41.3 million gallons in the first quarter of 2012 to 44.4 million gallons in the first quarter of 2013.

Alon also announced today that its Board of Directors has approved an increase in its regular quarterly cash dividend of $0.04 per share to $0.06 per share, or from $0.16 per share to $0.24 per share per annum, and a special non-recurring dividend of $0.16 per share. Both dividends are payable on June 14, 2013 to stockholders of record at the close of business on May 31, 2013.

CONFERENCE CALL

The Company has scheduled a conference call for Thursday, May 9, 2013, at 11:30 a.m. Eastern, to discuss the first quarter 2013 results. To access the call, please dial 877-941-6009, or 480-629-9818, for international callers, at least 10 minutes prior to the start time and ask for the Alon USA Energy call. Investors may also access the live webcast 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 May 23, 2013, and may be accessed by calling 800-406-7325, or 303-590-3030, for international callers, and using the passcode 4614672#. The archived webcast 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 Dennard  Lascar Associates at 713-529-6600 or email dwashburn@dennardlascar.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 directly owns crude oil refineries in California, Louisiana and Oregon, with an aggregate crude oil throughput capacity of approximately 144,000 barrels per day. Alon USA also owns 100% of the general partner and approximately 82% of the limited partner interests in Alon USA Partners, LP (NYSE: ALDW), which owns a crude oil refinery in Texas with an aggregate crude oil throughput capacity of approximately 70,000 barrels per day. Alon USA is a leading producer of asphalt, which it markets through its asphalt terminals predominately in the Western United States. Alon USA is the largest 7-Eleven licensee in the United States and operates approximately 300 convenience stores in Texas and New Mexico.

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.

This press release does not constitute an offer to sell or the solicitation of offers to buy any security and shall not constitute an offer, solicitation or sale of any security in any jurisdiction in which such offer, solicitation or sale would be unlawful.


Contacts:

Claire Hart, Senior Vice President

Alon USA Energy, Inc.

972-367-3649




Investors: Jack Lascar/ Sheila Stuewe

Dennard Lascar Associates, LLC 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. AND SUBSIDIARIES CONSOLIDATED

EARNINGS RELEASE




RESULTS OF OPERATIONS - FINANCIAL DATA

(ALL INFORMATION IN THIS PRESS RELEASE EXCEPT FOR BALANCE SHEET DATA AS OF DECEMBER 31, 2012, IS UNAUDITED)

For the Three Months Ended


March 31,


2013


2012


(dollars in thousands, except per share data)

STATEMENTS OF OPERATIONS DATA:




Net sales (1)

$

1,651,196



$

1,792,133


Operating costs and expenses:




Cost of sales

1,378,257



1,618,674


Unrealized losses on commodity swaps



45,312


Direct operating expenses

74,222



72,209


Selling, general and administrative expenses (2)

41,741



35,140


Depreciation and amortization (3)

31,163



30,711


Total operating costs and expenses

1,525,383



1,802,046


Gain on disposition of assets

18



131


Operating income (loss)

125,831



(9,782)


Interest expense (4)

(21,292)



(31,040)


Equity earnings (loss) of investees

(381)



61


Other income (loss), net (5)

83



(8,100)


Income (loss) before income tax expense (benefit)

104,241



(48,861)


Income tax expense (benefit)

30,590



(17,751)


Net income (loss)

73,651



(31,110)


Net income (loss) attributable to non-controlling interest

19,467



(1,743)


Net income (loss) available to stockholders

$

54,184



$

(29,367)


Earnings (loss) per share, basic

$

0.86



$

(0.52)


Weighted average shares outstanding, basic (in thousands)

61,957



56,028


Earnings (loss) per share, diluted

$

0.80



$

(0.52)


Weighted average shares outstanding, diluted (in thousands)

67,616



56,028


Cash dividends per share

$

0.04



$

0.04


CASH FLOW DATA:




Net cash provided by (used in):




Operating activities

$

160,770



$

30,873


Investing activities

(13,573)



(16,651)


Financing activities

(10,627)



(120,999)


OTHER DATA:




Adjusted net income available to stockholders (6)

$

54,172



$

8,449


Adjusted earnings per share (6)

$

0.86



$

0.15


Adjusted EBITDA (7)

156,678



66,224


Capital expenditures (8)

8,414



14,557


Capital expenditures for turnaround and chemical catalyst

5,216



2,105


 












March 31,

2013


December 31,

2012

BALANCE SHEET DATA (end of period):

(dollars in thousands)

Cash and cash equivalents

$

252,866



$

116,296


Working capital

211,011



87,242


Total assets

2,355,722



2,223,574


Total debt

586,371



587,017


Total debt less cash and cash equivalents

333,505



470,721


Total equity

693,267



621,186


 











REFINING AND MARKETING SEGMENT (A)





For the Three Months Ended


March 31,


2013


2012


(dollars in thousands, except per barrel data and pricing statistics)

STATEMENTS OF OPERATIONS DATA:




Net sales (9)

$

1,414,125



$

1,635,808


Operating costs and expenses:




Cost of sales

1,183,322



1,503,393


Unrealized losses on commodity swaps



45,312


Direct operating expenses

63,669



63,219


Selling, general and administrative expenses

13,921



8,536


Depreciation and amortization

26,505



26,277


Total operating costs and expenses

1,287,417



1,646,737


Operating income (loss)

$

126,708



$

(10,929)


KEY OPERATING STATISTICS:




Per barrel of throughput:




Refinery operating margin – Big Spring (10)

$

28.76



$

15.24


Refinery operating margin – CA Refineries (10)

N/A



N/A


Refinery operating margin – Krotz Springs (10)

13.14



5.81


Refinery direct operating expense – Big Spring (11)

5.68



3.58


Refinery direct operating expense – CA Refineries (11)

N/A



N/A


Refinery direct operating expense – Krotz Springs (11)

4.42



3.99


Capital expenditures

$

5,969



$

8,701


Capital expenditures for turnaround and chemical catalyst

5,216



2,105


PRICING STATISTICS:




Crack spreads (3/2/1) (per barrel):




Gulf Coast (12)

$

28.40



$

24.78


Crack spreads (3/1/1/1) (per barrel):




West Coast (12)

$

11.06



$

12.64


Crack spreads (2/1/1) (per barrel):




Gulf Coast high sulfur diesel (12)

$

8.20



$

12.46


WTI crude oil (per barrel)

94.27



103.00


Crude oil differentials (per barrel):




WTI less WTS (13)

$

11.41



$

2.16


LLS less WTI (13)

20.22



12.61


WTI less Buena Vista (13)

(15.76)



(13.00)


Product prices (dollars per gallon):




Gulf Coast unleaded gasoline

$

2.84



$

2.98


Gulf Coast ultra-low sulfur diesel

3.09



3.16


Gulf Coast high sulfur diesel

3.01



3.12


West Coast LA CARBOB (unleaded gasoline)

3.09



3.20


West Coast LA ultra-low sulfur diesel

3.13



3.24


Natural gas (per MMBTU)

3.48



2.50




(A)

In the fourth quarter of 2012, based on a change in our internal reporting structure as a result of the Alon USA Partners, LP initial public offering, the branded marketing operations have been combined with the refining and marketing segment and are no longer included with the retail segment. Information for the three months ended March 31, 2012 has been recast to provide a comparison to the current period results.






 















THROUGHPUT AND PRODUCTION DATA:

BIG SPRING REFINERY

For the Three Months Ended

March 31,


2013


2012


bpd


%


bpd


%

Refinery throughput:








WTS crude

45,220



76.0



55,546



79.9


WTI crude

11,549



19.4



12,206



17.6


Blendstocks

2,707



4.6



1,760



2.5


Total refinery throughput (14)

59,476



100.0



69,512



100.0


Refinery production:








Gasoline

29,785



50.4



35,140



50.7


Diesel/jet

19,298



32.6



22,236



32.1


Asphalt

3,359



5.7



4,535



6.6


Petrochemicals

3,726



6.3



4,136



6.0


Other

2,969



5.0



3,187



4.6


Total refinery production (15)

59,137



100.0



69,234



100.0


Refinery utilization (16)



92.4

%




96.8

%














THROUGHPUT AND PRODUCTION DATA:

KROTZ SPRINGS REFINERY

For the Three Months Ended

March 31,


2013


2012


bpd


%


bpd


%

Refinery throughput:








WTI crude

25,083



43.0



9,310



14.2


Gulf Coast sweet crude

31,516



53.9



55,352



84.3


Blendstocks

1,840



3.1



1,016



1.5


Total refinery throughput (14)

58,439



100.0



65,678



100.0


Refinery production:








Gasoline

26,916



45.0



27,533



41.6


Diesel/jet

22,382



37.5



28,713



43.4


Heavy Oils

1,773



3.0



5,045



7.6


Other

8,687



14.5



4,927



7.4


Total refinery production (15)

59,758



100.0



66,218



100.0


Refinery utilization (16)



74.2

%




77.8

%