For the full-year 2009, the company reported net income from continuing operations of $2.3 [image-nocss] million, or 4 cents per diluted share, versus net income from continuing operations of $24.6 million, or 46 cents per diluted share, in 2008.
In the refining segment, Gulf Coast refining economics remained severely depressed during the fourth quarter. In the retail segment, positive same-store sales trends continued to signal broad-based stabilization in the company's core southeastern U.S. markets.
"During 2009, we continued to reinvest in our diversified downstream asset portfolio, while seeking to expand our asset footprint beyond our core markets. In the year ahead, we remain committed to capitalizing on strategic opportunities without compromising balance sheet discipline," said Uzi Yemin, president and CEO of Delek US.
"Although our retail segment experienced weak demand for fuel and merchandise during the first half of 2009, business improved considerably during the second half of the year, as indicated by the strong same-store sales metrics reported in the third and fourth quarters of 2009," Yemin said.
"In recent months, we have renewed or extended maturities on more than $400 million in combined financing for our subsidiaries," he said. "In December 2009, our retail subsidiary extended a $108 million revolving credit facility by an additional year to April 2011. In February 2010, our refining subsidiary entered into a new, four-year, $300 million asset-backed revolving credit facility that includes a $300 million accordion feature, subject to lender commitments."
Refining contribution margin was $4.9 million in fourth-quarter 2009, versus $15.9 million in fourth-quarter 2008. Sustained weakness in refined product margins provided limited incentive to operate the Tyler refinery at normal rates during the fourth quarter, leading to lower production levels in the period.
Refining margin, adding back intercompany product marketing fees of 54 cents per barrel, was $3.91 per barrel sold in the fourth quarter 2009, compared to $12.07 per barrel sold for the same quarter last year.
Retail segment contribution margin declined to $300,000 in fourth-quarter 2009, compared to $9.4 million in fourth-quarter 2008. Retail contribution margin in fourth-quarter 2009 and fourth-quarter 2008 included goodwill impairment charges of $7 million and $11.2 million, respectively. Strong same-store sales of fuel (gallons) and merchandise were offset by a lower retail fuel margin in the fourth quarter 2009, when compared to the prior year period.
Same-store sales of fuel (gallons) and merchandise increased during the fourth quarter, continuing a trend of positive same-store comparisons which began in third-quarter 2009. The improvement in fourth-quarter same-store comparisons were favorably impacted by strong contributions from the company's "reimaged" MAPCO store locations.
Same-store sales of fuel (gallons) improved by 4.2% in the fourth quarter 2009, compared to a same store sales decline of 5.8% in the fourth quarter 2008. The retail segment sold a total of 108.7 million retail gallons during the three months ended Dec. 31, 2009, versus 106.3 million gallons in the prior year period.
The company's retail fuel margin was 12.9 cents per gallon in fourth-quarter 2009, compared to 25.5 cents per gallon in the prior year period. The retail fuel margin reported during the third and fourth quarters of 2008 was favorably impacted by weather-related supply disruptions.
Same-store merchandise sales increased 5.0% in fourth-quarter 2009, compared to a same-store sales decline of 8.1% in fourth-quarter 2008. Total merchandise sales in the retail segment totaled $93 million in the three months ended Dec. 31, 2009, versus $90.4 million in the prior year period. Increased revenue in the cigarette and candy categories were partially offset by weakness in the fountain, beer and dairy categories. Fourth-quarter 2009 merchandise margin was 30.2%, versus 30.0% in fourth-quarter 2008.
The company has restored nine of the 36 Virginia store locations to normal operations that were classified as discontinued operations during fourth-quarter 2008. Consequently, the results from these nine Virginia stores are reported in normal operations and the assets and liabilities associated with remaining stores are reflected in the appropriate balance sheet classifications for all periods.
Marketing segment contribution margin was $7.1 million in fourth-quarter 2009, compared to $3.7 million in fourth-quarter 2008. Fourth-quarter 2009 marketing segment contribution margin was favorably impacted from the year-ago period due to fees earned from the segment's crude logistics operations.
Delek US Holdings Inc. Brentwood, Tenn., is a diversified energy business focused on petroleum refining, marketing and supply of refined products, and retail marketing of fuel and general merchandise. The refining segment operates a high conversion, independent refinery, with a design crude distillation capacity of 60,000 barrels per day, in Tyler, Texas. The marketing and supply segment markets refined products through its terminals in Abilene, Texas, and San Angelo, Texas, as well as other third-party terminals. The retail segment markets gasoline, diesel and other refined petroleum products and convenience merchandise through a network of company-operated retail fuel and convenience stores, operated under the MAPCO Express, MAPCO Mart, East Coast, Discount Food Mart, Fast Food & Fuel and Favorite Markets brands.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.