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DALLAS -- It's a turbulent time for refiner, marketer and more than 300-unit c-store operator Alon USA Energy Inc., as its fourth quarter of fiscal 2007 was the worst in company history due to record crude oil prices; however, it saw the second best fiscal year in its history, helped by record throughput levels and new highs in sales for its asphalt and c-store segments.
"The fourth quarter for us was very challenging. And now we have this additional challenge of the major fire at Big Spring, and I'll be real honest with you, to say that we're unhappy would probably be an understatement," Jeff Morris, president and CEO of Alon, said in a conference call to investors. "But, alternatively, I've never seen a greater level of resolve by our employees, our board, our lenders and myself, to address the issues that we have facing us. I sincerely appreciate all of your support during this time."
After the quarter closed, a fire occurred Feb. 18, 2008, at the company's Big Spring Refinery, and currently, the company is working to re-establish production at the facility, said Morris, who noted in a statement that no major vessels, compressors or motors will require replacement due to the fire.
On a positive note, the company's board of directors approved plans for an initial public offering (IPO) for its retail and marketing businesses, which is expected to be completed by year-end. The retail IPO will consist of its branded transportation fuel marketing, including approximately 800 distributor-owned and –operated businesses, as well as its 307 company-owned and -operated c-stores. Alon USA will retain a majority share in the offering, according to Morris.
"We believe this is the right thing to do. This side of the business will be larger than some of the current publicly traded retail operations and we're confident in what we are doing," he said.
The company saw a net loss of $39.9 million in the fourth quarter of 2007, compared to a net income of $22 million in the comparable quarter. Net income for the year ended Dec. 31, 2007, was $103.9 million, compared to $157.4 million for the same period last year, the company stated.
"Those who know me well, know I have a propensity for being straightforward," said Morris. "I'll probably do that again today. In that regard, I can tell you I'm clearly disappointed in our fourth quarter performance and I take much of the responsibility for that myself."