United Refining Company Reports Second Quarter Fiscal 2010 Operating Results

    


    
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<p>WARREN, Pa., <span class="xn-chron">April 14</span> /CNW/ -- United Refining Company, a leading regional refiner and marketer of petroleum products announces operating results for the second fiscal quarter and six month period ended <span class="xn-chron">February 28, 2010</span>.</p>
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<p>Net sales for the three months ended <span class="xn-chron">February 28, 2010</span> and 2009 were <span class="xn-money">$594.7 million</span> and <span class="xn-money">$434.8 million</span>, respectively.  This was an increase of <span class="xn-money">$159.9 million</span> or 36.8% over the prior year period.  The increase was primarily due to higher retail and wholesale petroleum selling prices for the comparable period, reflecting overall market conditions.  Net sales for the six months ended <span class="xn-chron">February 28, 2010</span> and 2009 were <span class="xn-money">$1,215.7 million</span> and <span class="xn-money">$1,205.3 million</span>, respectively.  This was an increase of <span class="xn-money">$10.4 million</span> or .9% over the prior year period. The increase for the six month period was primarily due to higher retail petroleum selling prices, offset by slightly lower wholesale selling prices and volumes.  Combined retail and wholesale volumes increased slightly between the two periods and retail merchandise sales for the quarter and six months ended <span class="xn-chron">February 28, 2010</span> increased <span class="xn-money">$5.7 million</span> and <span class="xn-money">$11.4 million</span> respectfully.</p>
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<p>Operating income for the second quarter ended <span class="xn-chron">February 28, 2010</span> decreased <span class="xn-money">$38.2 million</span> from operating income of <span class="xn-money">$4.2 million</span> for the quarter ended <span class="xn-chron">February 28, 2009</span> to an operating loss of <span class="xn-money">$34.0 million</span> for the quarter ended <span class="xn-chron">February 28, 2010</span>.  Operating income for the six months ended <span class="xn-chron">February 28, 2010</span> decreased <span class="xn-money">$77.0 million</span> from operating income of <span class="xn-money">$19.3 million</span> for the six months ended <span class="xn-chron">February 28, 2009</span> to an operating loss of <span class="xn-money">$57.7</span> for the six months ended <span class="xn-chron">February 28, 2010</span>.</p>
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<p>Net loss for the second quarter ended <span class="xn-chron">February 28, 2010</span> increased <span class="xn-money">$22.2 million</span> from a net loss of <span class="xn-money">$3.1 million</span> for the quarter ended <span class="xn-chron">February 28, 2009</span> to net loss of <span class="xn-money">$25.3 million</span> for the quarter ended <span class="xn-chron">February 28, 2010</span>.  Net loss for the six months ended <span class="xn-chron">February 28, 2010</span> increased <span class="xn-money">$44.7 million</span> from a net loss of twelve thousand dollars for the six months ended <span class="xn-chron">February 28, 2009</span> to a net loss of <span class="xn-money">$44.7 million dollars</span> for the six month ended <span class="xn-chron">February 28, 2010</span>.</p>
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<p>Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) for the three months ended <span class="xn-chron">February 28, 2010</span> decreased <span class="xn-money">$38.2 million</span> to negative <span class="xn-money">$28.5 million</span> compared to <span class="xn-money">$9.7 million</span> for the three months ended <span class="xn-chron">February 28, 2009</span>.  EBITDA decreased <span class="xn-money">$77.6 million</span> for the six months ended <span class="xn-chron">February 28, 2010</span> to a negative <span class="xn-money">$47.0 million</span> from <span class="xn-money">$30.6 million</span> for the six months ended <span class="xn-chron">February 28, 2009</span>.</p>
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<p>United Refining Company uses the term EBITDA or Earnings Before Interest, Taxes, Depreciation and Amortization, which is a term not defined under <span class="xn-location">United States</span> Generally Accepted Accounting Principles.  The Company uses this term because it is a widely accepted financial indicator utilized to analyze and compare companies on the basis of operating performance and is used to calculate certain debt coverage ratios included in several of the Company's debt agreements.  See reconciliation of EBITDA to Net Income in Footnote (1) in the table set forth below.  The Company's method of computation of EBITDA may or may not be comparable to other similarly titled measures used by other companies.</p>
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                          UNITED REFINING COMPANY
                           (Dollars in thousands)
    
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                                  Three Months Ended        Six Months Ended
                                     February 28,             February 28,
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                                     2010       2009        2010        2009
                                     ----       ----        ----        ----
    Net Sales                    $594,748   $434,809  $1,215,674  $1,205,280
    Operating Income (Loss)      $(34,045)    $4,232    $(57,699)    $19,263
    Net Income (Loss)            $(25,345)   $(3,147)   $(44,655)       $(12)
    Income Tax Expense
     (Benefit)                   $(17,618)   $(2,351)   $(31,035)        $(9)
    EBITDA (1)                   $(28,475)    $9,672    $(46,964)    $30,599
    
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    (1) EBITDA Reconciliation:


    
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                         UNITED REFINING COMPANY
                         (Dollars in thousands)
    
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                                 Three Months Ended       Six Months Ended
                                    February 28,            February 28,
                                    ------------            ------------
                                     2010      2009       2010       2009
                                     ----      ----       ----       ----
    Net Income (Loss)            $(25,345)  $(3,147)  $(44,655)      $(12)
    Interest Expense                8,714     9,120     17,183     18,532
    Income Tax Expense
     (Benefit)                    (17,618)   (2,351)   (31,035)        (9)
    Depreciation                    4,223     4,057      8,440      8,176
    Amortization                    1,551     1,993      3,103      3,912
                                    -----     -----      -----      -----
    EBITDA                       $(28,475)   $9,672   $(46,964)   $30,599
    ------                       --------    ------   --------    -------


    
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<p>United operates a 70,000 bpd refinery in Warren, Pennsylvania.  In addition to its wholesale markets, the Company also operates 367 Kwik Fill® / Red Apple® and Country Fair® retail gasoline and convenience stores located primarily in western New York and western Pennsylvania.</p>
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<p>Certain statements contained in this release are forward looking, such as statements regarding the Company's plans and strategies or future financial performance.  Although the Company believes that its expectations are based on reasonable assumptions within the bounds of its knowledge, investors and prospective investors are cautioned that such statements are only projections and that actual events or results may differ materially from those expressed in any such forward-looking statements.  In addition, the Company's actual consolidated quarterly or annual operating results have been affected in the past, or could be affected in the future, by additional factors, including, without limitation, general economic, business and market conditions; environmental, tax and tobacco legislation or regulation; volatility of gasoline prices, margins and supplies; merchandising margins; customer traffic, weather conditions; labor costs and the level of capital expenditures.</p>
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For further information: James E. Murphy, Chief Financial Officer, [phone]