Alon USA Rebranding on Track

Company expects to meet third-quarter target

DALLAS -- Alon USA Energy Inc. CEO and president and CEO Paul Eisman said during the company's first-quarter 2012 earnings call, "We have begun our initiative to convert the Alon brand, and we are very pleased with the reception we have seen for the brand."

Through Alon Brands, its retail and branded marketing subsidiary, Alon USA operates more than 300 7-Eleven convenience stores in central and west Texas and New Mexico and markets and supplies FINA motor fuels to more than 900 independent and company-owned retail locations.

"We expect to complete the rebranding during the third quarter," he added.

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Alon USA announced a net loss for first-quarter 2012 of $29.4 million, compared to net income of $13.1 million, for the same period last year.

"Our first-quarter results reflect improvement in refining margins over those seen in the fourth quarter of last year, driven in good part by widening crude oil differentials," said Eisman, "These improved margins were partially offset during the quarter by lower byproduct pricing, and by weakness in midcontinent gasoline and diesel pricing relative to the Gulf Coast. While our reported results for the quarter were negatively impacted by $59.6 million of commodity swap hedge positions, of which $45.3 million is unrealized, this also reflects an improvement in the market conditions for the remainder of the year."

He added, "In our marketing segment, total branded fuel sales and retail fuel sales increased by approximately 9% and 13%, respectively, versus the first quarter of 2011. Additionally, our merchandise sales increased approximately 8% versus the same period last year. During the first quarter of 2012, wholesale fuel margins were negatively impacted as mid-continent light product prices were significantly discounted versus light product prices on the Gulf Coast."

Retail fuel sales volume increased by 12.8% from 36.7 million gallons in the first quarter of 2011 to 41.3 million gallons in first-quarter 2012. Our branded fuel sales volume increased by 9.3% from 85.6 million gallons in the first quarter of 2011 to 93.5 million gallons in the first quarter of 2012.

Alon USA Energy, Dallas, 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 owns four crude oil refineries in Texas, California, Louisiana and Oregon, with an aggregate crude oil throughput capacity of approximately 250,000 barrels per day. Alon is a leading producer of asphalt, which it markets through its asphalt terminals predominately in the western United States. Alon is the largest 7-Eleven licensee in the United States and operates approximately 300 convenience stores in Texas and New Mexico. Alon markets motor fuel products under the Alon and now-under-conversion FINA brands at these locations and at approximately 550 distributor-serviced locations.

For more on ALON and other growing fuel brands, look for the May issue of CSP magazine.