United Refining Company Reports Second Quarter Increased Operating Income By $5.4 Mil Over Previous Year



    WARREN, Pa., April 16 /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 February 28,
2007.
    Operating income for the second quarter ended February 28, 2007 increased
$5.4 million from a loss of $.1 million for the quarter ended February 28,
2006 to income of $5.3 million for the quarter ended February 28, 2007.
Operating income for the six months decreased $11.9 million from income of
$17.3 million for the six months ended February 28, 2006 to operating income
of $5.4 million for the six months ended February 28, 2007.  In addition, with
the seasonal increase in asphalt inventory over the winter months,
approximately $26 million of unrealized profit, based on current market
pricing, was in asphalt inventory at February 28th.
    Net sales for the three months ended February 28, 2007 and February 28,
2006 were $492.8 million and $506.5 million, respectively.  This was a
decrease of $13.7 million or 2.7% over the prior year period.  Retail
merchandise sales increased $2.5 million and retail petroleum sales increased
$11.9 million for the period, primarily due to increased sales volume.
Wholesale sales volumes declined $28 million however, they would have
increased during the second fiscal quarter had these volumes not been used to
build inventories for our scheduled maintenance turnaround, thereby deferring
sales to the third fiscal quarter.
    Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)
for the three months ended February 28, 2007 increased $5.0 million to $9.2
million compared to $4.2 million for three months ended February 28, 2006.
EBITDA decreased $13.1 million for the six months ended February 28, 2007, to
$14.2 million from $27.3 million for the six months ended February 28, 2007.
This decrease was primarily related to the precipitous fall in NYMEX crude oil
pricing during the first fiscal quarter.  Crude oil declined over $21 per
barrel during the first quarter from a high of $76.98/bbl in August to a low
of $55.81/bbl in November.  United Refining Company uses the term EBITDA or
Earnings Before Interest, Taxes, Depreciation and Amortization, which is a
term not defined under United States 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.


    
                           UNITED REFINING COMPANY
                            (dollars in thousands)

                                 Three Months Ended         Six Months Ended
                                     February 28,              February 28,
                                     2007      2006          2007        2006

    Net Sales                     $492,781  $506,485    $1,077,377  $1,080,477
    Operating Income (Loss)         $5,321      $(94)       $5,394     $17,258
    Net Income (Loss)                $(679)  $(3,897)      $(3,869)     $3,541
    Income Tax Expense (Benefit)     $(473)  $(2,566)      $(2,690)     $2,540
    EBITDA (1)                      $9,236    $4,226       $14,243     $27,324

    (1) EBITDA Reconciliation:



                           UNITED REFINING COMPANY
                            (dollars in thousands)

                                   Three Months Ended      Six Months Ended
                                      February 28,            February 28,
                                    2007        2006        2007      2006

    Net Income (Loss)              $(679)    $(3,897)    $(3,869)   $3,541
    Interest Expense               5,985       6,221      11,979    12,312
    Income Tax Expense (Benefit)    (473)     (2,566)     (2,690)    2,540
    Depreciation                   3,480       3,293       6,977     6,582
    Amortization                     923       1,175       1,846     2,349
    EBITDA                        $9,236      $4,226     $14,243   $27,324
    

    United operates a 65,000 bpd refinery in Warren, Pennsylvania.  In
addition to its wholesale markets, the Company also operates 371 Kwik Fill(R)
/ Red Apple(R) and Country Fair(R) retail gasoline and convenience stores
located primarily in western New York and western Pennsylvania.

    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.





For further information:

For further information: James E. Murphy, Chief Financial Officer of 
United Refining Company, +1-814-723-1500

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United Refining Company

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