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    Alon USA's Retail Arm Posts Record Performance

    The company has initiated the first phase of a store remodeling project, hoping to see a 10-percent lift in merchandise sales.

    By Melissa Kress, Convenience Store News

    DALLAS -- Alon Energy USA saw positive signs in the second quarter of 2011, and its retail segment, Southwest Convenience Stores LL, had its best quarter in its history.

    Paul Eisman, chief executive officer and president, revealed the good news during an earnings conference call this morning. Overall, the retail and branded marketing segment had a record performance with adjusted EBITDA of $14.1 million, which amounted to a 37-percent increase over the same period in 2010. Adjusted EBITDA for the past 12 months through June 30 came in at $42.3 million.

    According to the company's numbers, retail fuel sales gallons increased by 8.8 percent from 35.4 million gallons in the second quarter of 2010 to 38.5 million gallons in the second quarter of 2011. And the branded fuel sales jumped 22 percent over the same period last year.

    The record performance, according to Eisman, is a result of "simply focusing on the basics of operating well." He added the company expects the "excellent performance of the retail and merchandising programs to continue" through the remainder of the year.

    Fueling that optimism is the company's convenience store remodeling program. The first phase -- which just got underway -- includes 22 stores primarily in the Lubbock and Odessa, Texas areas. "We anticipate the remodeling program will help us continue the momentum we have seen [in the retail segment]," he said.

    The remodeling program will focus on improving the look of the stores and the foodservice. The company plans to spend between $100,000 and $125,000 per store, he added.

    And it expects the efforts to pay off. "We anticipate a 10-percent uplift in merchandise sales," Eisman explained. "The purpose of this test is to see if we can get there. So far, from what we've seen, it's very promising."

    All total, Alon USA Energy's net income for the second quarter of 2011 was $13.7 million, compared to a net lot of $29.3 million for the same period in 2010. "We continued to be pleased with our operations to date in the 2011 and even more excited about the prospects for our future," he said.

     

    By Melissa Kress, Convenience Store News
    • About Melissa Kress Melissa Kress joined EnsembleIQ's Convenience Store News and Convenience Store News for the Single Store Owner in November 2010. Her primary beats include alcoholic beverages and tobacco. Kress has been a professional journalist since 1995. A graduate of West Virginia University, she began her career in community journalism before moving to business-to-business publishing in 2000, covering commercial real estate.

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