METALS USA HOLDINGS CORP Net income was $66.7 million or $1.58 per diluted share in Q4-2015, with income from continuing operations of $29.2 million or $0.69 per diluted share
Sale of Hereford ethanol plant finalized for $98.2 million, contributing the majority of
$37.5 million in income from discontinued operations, or $0.89 per diluted share
Retail fuel volume grew 3.4% for the chain overall at 12.4 cpg margins as average per store month (APSM) volumes declined 1.4% against the record Q4-2014 environment
Merchandise sales increased 6.7% overall (1.7% APSM) at a 14.3% unit margin led by non-tobacco sales and margins, up 9.8% and 8.2%, respectively on an APSM basis
Added 44 new stores in the quarter, bringing the chain total to 1,335 stores at year end
Subsequent to quarter end, announced a Board approved strategic allocation of capital to pursue new additional growth opportunities and to undertake a share repurchase program of up to $500 million by December 31, 2017
"Murphy USA ended 2015 on an impressive trajectory, achieving our aggressive new store and merchandise growth plans for the year. While fuel performance moderated from the record 4th quarter 2014 environment, we grew total volume and market share for the year," said Andrew Clyde President and CEO. "The Company enters 2016 with strong earnings momentum from our major initiatives along with the clear focus of our independent growth plans and a sustained commitment to delivering value to our shareholders."
Consolidated Results
Key Operating Metrics | 2015 | 2014 | 2015 | 2014 |
Net income ($ Millions) | $ 66.7 | $ 98.3 | $ 176.3 | $ 243.9 |
Earnings per share (diluted) | $ 1.58 | $ 2.13 | $ 4.02 | $ 5.26 |
Net income from continuing operations ($ Millions) | $ 29.2 | $ 94.3 | $ 137.6 | $ 223.0 |
Earnings per share from continuing operations (diluted) | $ 0.69 | $ 2.04 | $ 3.14 | $ 4.81 |
Adjusted EBITDA ($ Millions) | $ 77.3 | $ 160.7 | $ 342.9 | $ 445.7 |
Income from continuing operations and Adjusted EBITDA for the quarter ending December 31, 2015 declined as retail fuel margins moderated to more historical levels when compared to the record margins earned in Q4-2014. The impact of lower retail fuel margins was offset in part by higher total fuel volume from new store additions, higher merchandise sales and margins, and improved product supply and wholesale contributions. Discontinued operations included a pre- tax gain of $60.8 million on the final adjusted sale of the Hereford Ethanol Plant.
The full year results and comparison primarily reflect the same factors, with the 2014 year also containing an after-tax benefit of $10.9 million from a LIFO decrement and a state tax benefit of
$6.8 million.
Fuel
Key Operating Metrics | 2015 | 2014 | 2015 | 2014 |
Retail fuel volume - chain (Million gal per year) | 1,074.3 | 1,038.9 | 4,123.8 | 3,980.8 |
Retail fuel volume - per site (K gal APSM) | 273.4 | 277.2 | 267.9 | 270.4 |
Retail fuel margin (cpg excl credit card fees) | 12.4 | 24.6 | 12.5 | 15.8 |
Retail fuel contribution ($K APSM) | $ 33.9 | $ 68.3 | $ 33.5 | $ 42.8 |
PS&W contribution ($ Millions excl RINs) | $ (7.8) | $ (46.3) | $ (16.8) | $ 13.4 |
RIN sales ($ Millions) | $ 23.6 | $ 26.8 | $ 117.5 | $ 92.9 |
Total network retail gallons sold in the quarter increased by 3.4%, ahead of demand growth in Murphy USA marketing areas. Per store volumes declined 1.4% APSM and 1.5% same store sales (SSS) reflecting a relatively more stable price environment in 2015 versus the steeply falling price environment witnessed throughout Q4 of 2014. For the full year, per site gallons declined 0.9% APSM and 1.0% SSS reflecting both the difference in Q4 volatility and the lack of the enhanced Walmart summer fuel discount program in 2015.
Product supply and wholesale margin dollars excluding RINs improved in the quarter as Q4 experienced a drop in Gulf Coast gasoline prices of 22 cents in Q4-2015 compared to 115 cent drop in 2014. The improvement for the quarter reflected improved inventory and timing variances offset by weaker supply-to-retail transfer prices due to the different market conditions.
Adding $23.6 million to the total fuel contribution was the sale of 53 million RINs at an average price of $0.45 per RIN in the current period. For the full year, RINs added $117.5 million to the bottom line as 218 million RINs were sold at an average price of $0.54 per RIN compared to 196 million RINs sold at an average price of $0.48 in 2014. For the full year, the combined contribution from PS&W and RINs effectively contributed an additional 2.44 cpg to the retail fuel contribution (e.g. dividing by retail gallons sold) in 2015 compared to 2.67 cpg in 2014.
Merchandise
Key Operating Metrics | 2015 | 2014 | 2015 | 2014 |
Total merchandise sales ($ Millions) | $ 586.0 | $ 549.4 | $ 2,273.9 | $ 2,161.4 |
Total merchandise contribution ($ Millions) | $ 83.9 | $ 79.0 | $ 327.5 | $ 301.6 |
Total merchandise sales ($K APSM) | $ 149.1 | $ 146.6 | $ 147.7 | $ 146.8 |
Merchandise unit margin (%) | 14.3% | 14.4% | 14.4% | 14.0% |
Tobacco contribution ($K APSM) | $ 12.70 | $ 13.08 | $ 12.53 | $ 12.45 |
Non-tobacco contribution ($K APSM) | $ 8.65 | $ 8.00 | $ 8.74 | $ 8.04 |
Total merchandise contribution ($K APSM) | $ 21.35 | $ 21.08 | $ 21.27 | $ 20.49 |
Total merchandise sales increased 6.7% in Q4 (up 5.2% full-year), driven both by new store additions and 2.6% SSS growth. Total merchandise margin contribution increased 6.2% for the quarter (up 8.6% full-year), as per store improvements and effective promotional sales helped drive better system-wide performance. While merchandise unit margins were down by 0.1% for the quarter, on a full-year basis unit margins were up 0.4%.
Tobacco contribution per store for the quarter was down 2.9% (down 1.2% SSS) primarily due to rebate adjustments in the Other Tobacco category. Cigarette margin dollars increased per site on relatively flat sales for the quarter. For the full year, the improvement in cigarette margin dollars led to the overall increase in tobacco contribution.
Non-tobacco contribution per store increased 8.2% APSM (6.2% SSS) for the quarter, driven by increases in beverages, general merchandise and lotto/lottery categories. Beverages continue to benefit from larger stores, enhanced product mix and promotions, and refresh/super-cooler improvements.
Other areas
Key Operating Metrics | 2015 | 2014 | 2015 | 2014 |
Total station and other operating expense ($ Millions) | $ 127.9 | $ 125.6 | $ 486.4 | $ 486.8 |
Station OPEX excl credit card fees ($K APSM) | $ 23.36 | $ 23.03 | $ 22.44 | $ 22.45 |
Total SG&A cost ($ Millions) | $ 32.3 | $ 32.6 | $ 129.3 | $ 119.3 |
Total station and other operating expenses increased $2.3 million for the quarter while retail station operating expenses on an APSM basis declined 3.0%, primarily due to lower credit card
fees associated with lower average fuel prices. For the full year, total operating expenses on a per store month basis remained flat, excluding credit card fees.
Total SG&A was relatively flat for the quarter. For the full year, higher SG&A reflects professional fees and other costs associated with the company's business improvement initiatives.
Station Openings
Murphy USA opened 44 retail locations in Q4-2015, bringing the year end store count to 1,335 locations that include 1,111 Murphy USA sites and 224 Murphy Express sites. A total of 73 stores were opened during the year and one Murphy USA location at a Neighborhood Market location was closed with the real estate sold to a third party.
Cash Flow and Financial Resources
Key Metrics (Millions except average shares) | 2015 | 2014 | 2015 | 2014 |
Cash flow from continuing operations | $ 95.8 | $ 86.0 | $ 233.7 | $ 276.7 |
Capital expenditures (cash) | $ (53.7) | $ (51.0) | $ (205.2) | $ (135.3) |
Free cash flow (non-GAAP) | $ 42.1 | $ 35.0 | $ 28.5 | $ 141.4 |
Cash and cash equivalents | $ 102.3 | $ 327.2 | ||
Long-term debt | $ 490.2 | $ 488.3 | ||
Average shares outstanding, thousands (diluted) | 43,794 | 46,417 |
Free cash flow from the quarter increased by $7 million as the increase in net cash from continuing operations exceeded the increase in capital expenditures. For the full year, free cash flow decreased by $113 million as net cash from continuing operations was down $43 million while capital expenditures increased $70 million.
Not included in the 2015 year-end cash balance is restricted cash of $68.6 million related to unspent sales proceeds from the Hereford ethanol plant sale that are currently being held by a third party trustee in order for the Company to participate in like-kind exchange transactions to defer tax gain on the sale of the plant. This restricted cash is included in non-current assets on the balance sheet at December 31, 2015.
The Company's asset-based loan facility remains undrawn with a borrowing base of $134.5 million as of January 2016.
No shares were repurchased during the current quarter. For the full year, $248.7 million was used for the share repurchase program, leading to the reduction in shares outstanding.
Murphy Oil USA Inc. issued this content on 03 February 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 03 February 2016 22:47:29 UTC
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