El Dorado, Arkansas, May 4,
2015 - Murphy USA Inc. (NYSE: MUSA), a leading marketer of
retail motor fuel products and convenience merchandise, today
announced financial results for the first quarter ended March 31,
2015.
Key First Quarter 2015
highlights
-
Net income of $22.9 million increased $13.3
million from Q1 2014 net income of $9.6 million
-
Earnings per share, assuming dilution, were
$0.50 compared to $0.21 in Q1 2014
-
Retail fuel volumes grew 5.8% overall for the
quarter and 1.0% on an average per store month (APSM) basis
-
Non-tobacco merchandise sales increased 6.7%
APSM and associated margin dollars increased 3.2% APSM.
-
New stores added in the quarter totaled five
with an additional three sites opened since quarter end and 16
sites under construction
-
Hereford ethanol production rate and yield
achieved a combined quarterly plant record, offsetting in part
weaker crush spreads
-
Share repurchases in the first quarter totaled
$39 million
-
Cash and cash equivalents ended the quarter at
$287.7 million
Three-month
results
For the three month period ended March 31, 2015,
the Company reported net income of $22.9 million or $0.50 per
diluted share on revenues of $3.0 billion. Net income was
$9.6 million, or $0.21 per diluted share, for the comparable period
in 2014 on revenues of $4.2 billion. Average retail fuel
prices for the first quarter 2015 (including taxes) were $2.10 per
gallon versus $3.23 per gallon in the same period of 2014.
Income from continuing operations was $22.9 million or $0.50 per
diluted share in Q1 2015 compared to $8.8 million and $0.19 per
diluted share in the same period in 2014. The increase in
earnings reflects higher retail fuel margins and volumes, higher
RIN sales proceeds and lower product supply and wholesale
contribution. The first quarter of 2014 contained an
after-tax benefit of $10.9 million from a LIFO decrement in that
period. There was no income from discontinued operations in
the current quarter while the 2014 quarter contained the final
adjustments to working capital from the sale of the Hankinson plant
which resulted in a gain of $0.8 million ($0.02 per diluted share),
net of tax.
"The first quarter of 2015 got off to a strong
start as retail fuel volume and margin momentum carried over from
Q4 of last year," said President and CEO Andrew Clyde.
"Merchandise sales and margins also remain robust while low gas
prices have led consumers to upgrade their product choices. While
fuel prices have increased in recent months, we continue to benefit
from our exposure to elevated RIN prices and our low cost business
model positions us to take advantage of future price volatility."
said Mr. Clyde.
Adjusted EBITDA (this non-GAAP measure is
described and reconciled to the corresponding GAAP measure in the
Supplemental Disclosure section of this release) was $62.7 million
for the three month period ended March 31, 2015, compared to $43.2
million for the same period in 2014.
Quarterly retail fuel sales increased 5.8% to
962.7 million gallons sold in 2015 compared to 910.1 million
gallons sold in 2014. Retail fuel gallons sold on an APSM
basis increased 1.0% to 253,663 gallons. Retail fuel margins
(before credit card expenses) increased 3.2 cents per gallon (cpg)
to 10.0 cpg in the 2015 quarter compared to 6.8 cpg in the 2014
period. Product supply and wholesale margin dollars excluding
Renewable Identification Numbers (RINs) decreased to a loss of $1.1
million in the 2015 period compared to income of $29.8 million in
the first quarter of 2014, which included a benefit of $17.8
million related to a LIFO decrement in the 2014 quarter.
Income generated from the sale of RINs increased to $37.6 million
in the first quarter of 2015 from $17.6 million in the 2014 period
as 54 million RINs were sold at an average price of $0.70 per RIN
in the current period.
Quarterly merchandise revenues rose $21.4 million
to $524.1 million from $502.7 million in the 2014 period.
Merchandise unit margins held constant at 14.0%. For the
current quarter, total non-tobacco sales dollars increased 11.7%
with the largest increases shown in dispensed beverages,
alternative snacks and lottery/lotto while margin dollars increased
8.1%. On an APSM basis, merchandise sales decreased 0.5% as
tobacco products fell 2.4%, mostly offset by a 6.7% increase in
non-tobacco sales. Quarterly merchandise margin dollars on an
APSM basis were flat overall with tobacco margin dollars down 2.1%,
offset by an increase in non-tobacco margin dollars of 3.2%.
Station and other operating expenses held
relatively flat at $122.2 million for the current quarter, compared
to $122.5 million for the same period in 2014. Retail costs
on an APSM basis declined 4.6% period over period, primarily due to
reduced credit card fees associated with lower retail fuel
prices. Excluding credit card expenses, station operating
expenses on an APSM basis increased only 0.1%. Selling,
general and administrative (SG&A) expenses increased $3.4
million to $31.5 million due primarily to higher professional
services fees for ongoing projects.
The Company's ethanol plant in Hereford, Texas,
generated an operating loss of $0.6 million for the first quarter
of 2015 compared to a net gain of $1.2 million in Q1 2014
reflecting lower market crush spreads. Plant production
increased 30% to 22.3 million gallons and yield increased 6.8% to
2.82 gallons per bushel for the quarter.
Interest expense decreased by $0.8 million in the
first quarter 2015 compared to the prior year quarter due to the
repayment in May 2014 of a $150 million term loan under our credit
facilities.
Capital expenditures for the quarter ended March
31, 2015, increased $8.8 million to $32.5 million from $23.7
million in 2014. Current capital expenditures include $22.4
million for retail growth and $8.4 million spent on retail
maintenance items.
Station
Openings
During the first quarter of 2015, Murphy USA
opened five retail locations. Through early May 2015, the
Company has opened an additional three sites. With the
addition of all these stores, Murphy USA has 1,271 total locations
in operation that include 1,062 Murphy USA sites and 209 Murphy
Express sites. We also have 16 sites currently under
construction that will add to our network in the near
future.
Cash Flow and
Financial Resources
For the quarter ended March 31, 2015, cash flow
provided by operating activities decreased $78.4 million to $34.4
million due primarily to prior year liquidations of
inventory. Cash flows required by investing activities in the
first quarter of 2015 increased $9.4 million to $32.5 million,
consisting primarily of property additions. Cash flows used
in financing activities increased $27.3 million to $42.4 million in
the first quarter of 2015 due to the share repurchase program
currently being executed as announced in late 2014. Free cash
flow (this non-GAAP measure is described and reconciled to the
corresponding GAAP measure in the Supplemental Disclosure section
of this release) for the period was $2.2 million compared to $89.1
million in the prior year period. The large decrease was due
to no repeat of inventory liquidations that occurred in 2014,
reduction of income taxes payable as well as higher capital
expenditures in Q1 2015.
Cash and cash equivalents on hand at March 31,
2015 totaled $287.7 million and there were no borrowings under the
asset-based loan facility, which was put in place with an initial
borrowing base limit of $450.0 million in mid-August 2014.
Using March 31, 2015 information, the borrowing base was
recalculated at $239.3 million in April 2015 and remains
undrawn. Total debt at March 31, 2015 of $488.9 million (net
of unamortized debt discount and debt issuance costs) consisted
primarily of the $500.0 million in senior unsecured notes due in
2023.
"While Q1 is historically a low period for new
retail site openings, we filled the real estate and development
pipeline to accelerate growth in the second half of the year," said
Mr. Clyde. "At the same time, we demonstrated significant
progress and results with the improvements at Hereford. We also
delivered on our commitment to return value to our shareholders
with the ongoing share repurchase program. Our balance sheet
continues to support our capital allocation priorities of organic
growth and shareholder returns."
Earnings Call
Information
The Company will host a conference call on May 5,
2015, at 10:00 a.m. Central time to discuss first quarter 2015
results. The conference call number is 1 (877) 291-1367 and
the conference number is 19244028. A live audio webcast of the
conference call and the earnings and investor related materials,
including reconciliations of any non-GAAP financial measures to
GAAP financial measures and any other applicable disclosures, will
be available on that same day on the investor section of the Murphy
USA website (http://ir.corporate.murphyusa.com). Online
replays of the earnings call will be available through Murphy USA's
web site and a recording of the call will be available through May
11, 2015, by dialing 1(855) 859-2056 and referencing conference
number 19244028.
Forward-Looking
Statements
Certain statements in this news release contain or
may suggest "forward-looking" information (as defined in the
Private Securities Litigation Reform Act of 1995) that involve risk
and uncertainties, including, but not limited to anticipated store
openings, fuel margins, merchandise margins, sales of RINs and
trends in our operations. Such statements are based upon the
current beliefs and expectations of the company's management and
are subject to significant risks and uncertainties. Actual
future results may differ materially from historical results or
current expectations depending upon factors including, but not
limited to: our ability to continue to maintain a good business
relationship with Walmart; successful execution of our growth
strategy, including our ability to realize the anticipated benefits
from such growth initiatives, and the timely completion of
construction associated with our newly planned stores which may be
impacted by the financial health of third parties; our
ability to effectively manage our inventory, disruptions in our
supply chain and our ability to control costs; the impact of any
systems failures, cybersecurity and/or security breaches, including
any security breach that results in theft, transfer or unauthorized
disclosure of customer, employee or company information or our
compliance with information security and privacy laws and
regulations in the event of such an incident; successful execution
of our information technology strategy; future tobacco or
e-cigarette legislation and any other efforts that make purchasing
tobacco products more costly or difficult could hurt our revenues
and impact gross margins; efficient and proper allocation of our
capital resources; compliance with debt covenants; availability and
cost of credit; and changes in interest rates. Our SEC
reports, including our Annual Report on our Form 10-K for the year
ended December 31, 2014 (filed February 27, 2015) and, when
available, our Quarterly Report on Form 10-Q for the three months
ended March 31, 2015 contain other information on these and other
factors that could affect our financial results and cause actual
results to differ materially from any forward-looking information
we may provide. The company undertakes no obligation to
update or revise any forward-looking statements to reflect
subsequent events, new information or future
circumstances.
Contact:
Investors/Media
Tammy L. Taylor (870) 881-6853, Sr. Manager
Investor Relations and Corporate Communications
taylotl@murphyusa.com
Click below to access financial schedules:
Q1 Earnings Release
Attachments
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Murphy USA Inc. via Globenewswire
HUG#1918655
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