Holly Corp. (HOC) filed Quarterly Report for the period ended 2009-09-30.
Holly Corporation is an independent refiner of petroleum and petroleum derivatives and produces high value light products such as gasoline diesel fuel and jet fuel for sale primarily in the southwestern United States and northern Mexico. Navajo Refining Company (``Navajo``) one of the wholly-owned subsidiaries owns a high-conversion petroleum refinery in Artesia New Mexico which it operates in conjunction with crude vacuum distillation and other facilities situated 65 miles away in Lovington New Mexico (collectively the ``Navajo Refinery``). Holly Corp. has a market cap of $1.44 billion; its shares were traded at around $28.71 with a P/E ratio of 10.4 and P/S ratio of 0.2. The dividend yield of Holly Corp. stocks is 2%. Holly Corp. had an annual average earning growth of 29.2% over the past 10 years. GuruFocus rated Holly Corp. the business predictability rank of 2.5-star.
Highlight of Business Operations:
Our principal source of revenue is from the sale of high value light products such as gasoline, diesel fuel, jet fuel and specialty lubricant products in markets in the southwest, rocky mountain and mid-continent regions of the United States and in northern Mexico. For the nine months ended September 30, 2009, sales and other revenues were $3,179.6 million and net income attributable to Holly Corporation stockholders was $60 million. For the nine months ended September 30, 2008, sales and other revenues were $4,943.7 million and net income attributable to Holly Corporation stockholders was $70 million. Our principal expenses are costs of products sold and operating expenses. Our total operating costs and expenses for the nine months ended September 30, 2009 were $3,043.5 million compared to $4,830.9 million for the nine months ended September 30, 2008.
On June 1, 2009, we acquired the Tulsa Refinery from Sunoco, Inc. (“Sunoco”) for $157.8 million, including crude oil, refined product and other inventories totaling $92.8 million. The Tulsa Refinery is located on an approximate 750-acre site in Tulsa, Oklahoma and has a total crude oil throughput capacity of 85,000 BPSD. The refinery produces fuel products including gasoline, diesel fuel and jet fuel and serves markets in the mid-continent region of the United States and also produces specialty lubricant products that are marketed throughout North America and are distributed in Central and South America.
On June 10, 2009, we issued $200 million in aggregate principal amount of 9.875% senior notes due 2017 (the “Holly Senior Notes”). A portion of the $188 million in net proceeds received was used for post-closing payments for inventories of crude oil and refined products from Sunoco following the closing of the Tulsa Refinery purchase on June 1, 2009. On October 26, 2009 we issued $100 million aggregate principal amount of our senior notes as an add-on offering to the Holly Senior Notes that we intend to use to fund the cash portion of our pending acquisition of Sinclair Oil Company’s (“Sinclair”) 75,000 BPD refinery located in Tulsa, Oklahoma (see discussion under “planned capital expenditures”).
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