Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: bruwin who wrote (23169)	1/20/2006 3:34:00 AM
From: Carl Worth	Respond to of 78639

biz.yahoo.com hard to see where results from a 2004 annual report are relevant in january of 2006, especially when the picture has changed so dramatically this is no endorsement of ALJ, but it should at least be looked at accurately

To: bruwin who wrote (23169)	1/20/2006 11:19:11 AM
From: Broken_Clock	Read Replies (1) \| Respond to of 78639

Press Release Source: Alon USA Energy, Inc. Alon USA Prepays Term Loan Thursday January 19, 4:03 pm ET DALLAS, Jan. 19 /PRNewswire-FirstCall/ -- Alon USA Energy, Inc. (NYSE: ALJ - News; "Alon") today announced that it has prepaid its $100 million term loan, due January 14, 2009, reducing the Company's total debt outstanding to approximately $33 million. According to the terms of the loan, Alon did not have the right to prepay the loan before January 2006. ADVERTISEMENT [0] "Due to the strength of Alon's balance sheet we have decided to use approximately one third of the Company's cash to reduce debt. After this debt repayment we will have approximately $200 million of cash and cash equivalents," stated Jeff Morris, Alon's President and CEO. "As we outlined in the Company's initial public offering prospectus we intended to repay all outstanding amounts under the term loan in the first quarter of 2006 and we are proud that we were able to accomplish this goal." The loan had a current interest rate of 10.6%, thus the Company anticipates the repayment will have an annual incremental interest savings of approximately $6 million starting in 2007. The Company anticipates the repayment of the loan will only have a small incremental impact on interest expense for 2006 since the Company will fully expense its deferred debt issuance costs of $3.9 million and will pay a loan prepayment premium of $3 million in the first quarter of 2006. Alon USA Energy, Inc., headquartered in Dallas, Texas, is an independent refiner and marketer of petroleum products, operating primarily in the Southwestern and South Central regions of the United States. The Company owns and operates a sophisticated sour crude oil refinery in Big Spring, Texas, which has a crude oil throughput capacity of 70,000 barrels per day. Alon USA markets gasoline and diesel products under the FINA brand name and is a leading producer of asphalt in the State of Texas. The Company also operates convenience stores in West Texas and New Mexico under the 7-Eleven and FINA brand names and supplies motor fuels to these stores from its Big Spring refinery. Any statements in this press release that are not statements of historical fact are forward-looking statements. Forward-looking statements reflect our current expectations regarding future events, results or outcomes. These expectations may or may not be realized. Some of these expectations may be based upon assumptions or judgments that prove to be incorrect. In addition, our business and operations involve numerous risks and uncertainties, many of which are beyond our control, which could result in our expectations not being realized or otherwise materially affect our financial condition, results of operation and cash flows. Additional information regarding these and other risks is contained in our filings with the Securities and Exchange Commission.

To: bruwin who wrote (23169)	1/20/2006 2:51:07 PM
From: Broken_Clock	Read Replies (3) \| Respond to of 78639

bruwin, Here's another take from the Fool today. Motley Fool Alon USA Cleans Out Debt Friday January 20, 12:33 pm ET By Robert Aronen Back in November, I highlighted Alon USA Energy (NYSE: ALJ - News), one of the smallest refining companies in the country. As I said in the original piece, I think this is a company to watch due to experienced management, excellent growth prospects, and a strong balance sheet. Thursday, the balance sheet became even stronger when the company announced that it had prepaid a $100 million term loan that carried a hefty interest rate of 10.6%. This move will result in $6 million in interest savings starting in 2007. There will be little cost savings this year because (1) the company will fully expense the $3.9 million in fees associated with securing the loan (normally such fees would have been amortized over the remaining three years of the loan); and (2) the loan agreement included a prepayment penalty of $3 million for paying the loan off early. Nevertheless, after prepaying the loan, the company coffers will have nearly $200 million of cash and equivalents vs. only about $33 million in total debt outstanding. During Alon USA's presentation at the Lehman Brothers Energy and Power Conference in September, management indicated that it intends to pay a dividend. To date, a dividend hasn't been declared. However, with the high-interest debt prepaid and cash piling up on the balance sheet, I wouldn't be surprised to see Alon USA declare a dividend when it reports its fourth-quarter results. The company hasn't yet announced what day it will be reporting, but it should be around the second week of February. Even without a dividend, it is fairly clear to me that Alon USA is undervalued and flies below the radar of Wall Street's analysts. The company's market cap of $1 billion includes nearly $200 million in cash and equivalents, a 70,000 bpd (barrels per day) refinery capacity, more than 160 convenience stores, pipelines, three product terminals, and two asphalt terminals. Last year, Valero Energy (NYSE: VLO - News) purchased Premcor and its 790,000 bpd of capacity for $8 billion -- just over $10,000 per bpd. This suggests that Alon USA's refinery alone is worth around $700 million (70,000 bpd times $10,000 per bpd). In other words, Alon USA's refinery and cash balance account for about 90% of its current market cap of $1 billion. With demand for gasoline increasing, muscle cars being the highlight of the Detroit Auto Show, and no new refineries on the horizon, refining companies should maintain their record profits for the foreseeable future. Investors looking for a growing company selling for a reasonable price could do worse than running the numbers on Alon USA. Fool contributor Robert Aronen owns shares of none of the companies mentioned.