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FRANKLIN, Tenn. -- Delek US Holdings recorded high earnings for the second quarter ended June 30, 2006 -- net income rose to a record $42.2 million, from $6.9 million for the same time period in 2005, and net sales for the company totaled $819.6 million, an increase of 78 percent over last years $459.7 million.
"We achieved outstanding financial and operating results for the second quarter of 2006. We were especially pleased by the strong operational execution in both our businesses," said president and CEO Uzi Yemin.
"The strength of our retail operations can be measured in the 4 percent growth in same-store merchandise sales, an improved merchandise margin and the expansion of our retail fuel margin to 16 cents per gallon, despite the significant rise in retail fuel prices compared with the second quarter of 2005," he added in a written statement.
Delek's retail margin for Q2 was $15.2 million, reflecting a 9.1 percent increase in merchandise sales, totaling $82.4 million. Retail margins also included a 4 percent increase for same-store sales for the quarter. Merchandise margins also increased to 30.8 percent, attributed to increased sales of high margin items -- food, coffee, fountain drinks and the GrilleMarx branded foods.
Total fuel sales for the retail segment increased more than 49 percent to $283.2 million, due to the 31 percent increase in average retail price per gallon for the quarter. Gallons sold topped 95.2 million, an increase from the 86 million gallons recorded for last year's second quarter. The number of convenience stores increased to 349 by the end of the quarter -- from 329 for the same quarter last year -- and accounts for the comparable quarter fuel sales growth.
Credit card expenses also grew for the second quarter, totaling $1.3 million, an increase of 62.8 percent from the fees paid for the second quarter of 2005. The company attributes the increase in fees to the higher fuel prices and the interchange fees imposed by credit card companies.
Delek continues to "build the foundation for future growth" with acquisitions in its refining and retail segments, said Yemin. Delek added 43 retail fuel and convenience stores located in Northwest Georgia and Southeast Tennessee, The company also opened two MAPCO Marts, the "next-generation convenience store concept," said Yemin. Delek also re-opened one retro-fitted convenience store during the second quarter.
Yemin also stated the company's strategy for future record quarters. "In our retail fuel and convenience store business, we are fully engaged in initiatives to expand same-store sales and achieve enhanced profitability within our existing store base. We also remain confident of the ongoing potential for attractive acquisitions within our existing geographic foot-print or in contiguous markets."
Delek US Holdings is a diversified energy company that focuses on the refining and retail marketing of petroleum products. Its retail segment sells gasoline, diesel and convenience merchandise through its network of 389 company-operated fuel and convenience stores under the MAPCO Express, MAPCO Mart, East Coast and Discount Food Mart banners.