EXHIBIT 99
GIANT INDUSTRIES, INC.
NEWS RELEASE
Contact: Mark B. Cox
Vice President, Treasurer, & Chief Financial Officer
Giant Industries, Inc.
(480) 585-8888
FOR IMMEDIATE RELEASE
November 10, 2003
GIANT INDUSTRIES, INC. ANNOUNCES
RECORD THIRD QUARTER RESULTS
Scottsdale, Arizona (November 10, 2003) -- Giant Industries, Inc.
[NYSE: GI] today reported net earnings of $7.5 million, or $0.86
per share for the third quarter ended September 30, 2003. Net
earnings in the third quarter of 2003 included a pre-tax write-down
of assets that totaled $1.1 million. Net earnings were a loss of
($4.6 million), or ($0.53) per share in the third quarter of 2002.
The Company reported net earnings of $9.6 million, or $1.10 per
share, for the first nine months of 2003 compared to a net loss of
($8.7 million), or ($1.02) per share in 2002.
Giant's Chairman and Chief Executive Officer, Fred Holliger
commented, "Good performance from each of our strategic business
units led to record third quarter earnings. Our refining operations
had a strong quarter as higher gasoline crack spreads contributed
to a significant improvement in refining margins versus the prior
year levels. Refining margins at our Four Corners refineries
increased from $6.04 in the third quarter of last year to $9.51 in
the same quarter this year and refining margins at our Yorktown
refinery increased from $1.71 to $4.61 for the same period. These
margins, combined with an increase in volumes, contributed to a
significant improvement in earnings. Refinings' operating earnings
were $23.8 million in the third quarter of 2003 versus a breakeven
level for the same period last year. These results were realized
even though operations at our Yorktown refinery were scaled back
and subsequently shut down for a period of time as Hurricane Isabel
passed through the area. I would like to commend our Yorktown
personnel for their efforts in securing and protecting our
refinery. As a result of their efforts, our facility experienced
very minimal damage."
"Our retail operations also had good results in the quarter. Store
operating profit from continuing operations increased to $5.1
million in the third quarter of 2003 versus $2.1 million for the
same period last year. While a significant improvement in retail
fuel margins was a major factor in the improved profitability, our
program to divest of non-strategic, poor performing stores and
continuing creative marketing in our stores also made strong
contributions to the improved profitability."
"In the quarter, Phoenix Fuel continued to achieve growth in both
wholesale and cardlock fuel volumes that contributed to increased
earnings versus the prior year level. In addition, our team at
Phoenix Fuel did a superb job of servicing our Phoenix-based
customers when the recent pipeline problem between Tucson and
Phoenix interrupted the supply of finished products to this
market."
Holliger continued, "When we reported our 2002 earnings earlier
this year, I stated that we had a goal to realize $20-$30 million
from the sale of non-strategic assets in 2003. With the recent
completion of the sale of our corporate office building we have
reached this goal, and we are working on additional sales."
With regard to the Company's debt reduction strategy, Holliger
remarked, "We have made significant progress in reducing our level
of debt. Since we acquired the Yorktown refinery, in May 2002, we
have reduced our debt by approximately $83 million, $19 million of
which was achieved in the recent third quarter. Presently, our
revolver has no borrowings outstanding. While we are pleased with
this level of debt reduction, we remain committed to further debt
reduction as it will contribute to improved profitability and will
also provide the needed flexibility to further grow our Company."
Giant's senior management will hold a conference call at 1 p.m. ET
on November 11, 2003 to discuss this earnings release and provide
an update on Company operations. The conference call will be
broadcast live on the Company's website at www.giant.com.
Giant Industries, Inc., headquartered in Scottsdale, Arizona, is a
refiner and marketer of petroleum products. Giant owns and operates
one Virginia and two New Mexico crude oil refineries, a crude oil
gathering pipeline system based in Farmington, New Mexico, which
services the New Mexico refineries, finished products distribution
terminals in Albuquerque, New Mexico and Flagstaff, Arizona, a
fleet of crude oil and finished product truck transports, and a
chain of retail service station/convenience stores in New Mexico,
Colorado, and Arizona. Giant is also the parent company of Phoenix
Fuel Co., Inc., an Arizona wholesale petroleum products
distributor. For more information, please visit Giant's website at
www.giant.com.
This press release contains forward-looking statements that involve
known and unknown risks and uncertainties. Forward-looking
statements are identified by words or phrases such as "believes,"
"expects," "anticipates," "estimates," "should," "could," "plans,"
"intends," "will," variations of such words and phrases, and other
similar expressions. While these forward-looking statements are
made in good faith, and reflect the Company's current judgment
regarding such matters, actual results could vary materially from
the forward-looking statements. Important factors that could cause
actual results to differ from forward-looking statements include,
but are not limited to: the inability to attain expected debt
reductions, the inability to sell additional assets, including the
completion of asset sales scheduled to close in the fourth quarter,
and other risks detailed from time to time in the Company's filings
with the Securities and Exchange Commission. All subsequent written
and oral forward-looking statements attributable to the Company, or
persons acting on behalf of the Company, are expressly qualified in
their entirety by the foregoing. Forward-looking statements made by
the Company represent its judgment on the dates such statements are
made. The Company assumes no obligation to update any forward-
looking statements to reflect new or changed events or
circumstance.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands except shares and per share data)
- ----------------------------------------------------------------------------------------------------
Three Months Ended Nine Months Ended
September 30, September 30,
- ----------------------------------------------------------------------------------------------------
2003 2002 2003 2002
- ----------------------------------------------------------------------------------------------------
Net revenues $ 472,668 $ 382,472 $1,359,900 $ 849,036
Cost of products sold (excluding
depreciation and amortization) 389,182 331,055 1,135,811 704,809
- ----------------------------------------------------------------------------------------------------
Gross margin 83,486 51,417 224,089 144,227
Operating expenses 41,197 36,241 121,092 88,950
Depreciation and amortization 9,330 9,169 27,779 25,830
Selling, general and administrative expenses 8,126 7,031 22,421 18,587
Net loss (gain) on disposal/write-down of assets 1,081 (157) 1,314 (135)
- ----------------------------------------------------------------------------------------------------
Operating income (loss) 23,752 (867) 51,483 10,995
Interest expense (9,672) (10,455) (29,696) (25,985)
Amortization/write-off of financing costs (1,202) (954) (3,591) (2,071)
Interest and investment income 15 74 98 399
- ----------------------------------------------------------------------------------------------------
Earnings (loss) from continuing operations before
income taxes 12,893 (12,202) 18,294 (16,662)
Provision (benefit) for income taxes 5,239 (5,041) 7,473 (6,586)
- ----------------------------------------------------------------------------------------------------
Earnings (loss) from continuing operations before
cumulative effect of change in accounting principle 7,654 (7,161) 10,821 (10,076)
Discontinued operations, net of income tax (benefit)
provision of $(84), $1,726, $(344) and $894 (125) 2,589 (515) 1,342
Cumulative effect of change in accounting principle,
net of income tax benefit of $468 - - (704) -
- ----------------------------------------------------------------------------------------------------
Net earnings (loss) $ 7,529 $ (4,572) $ 9,602 $ (8,734)
====================================================================================================
Net earnings (loss) per common share:
Basic
Continuing operations $ 0.87 $ (0.83) $ 1.24 $ (1.18)
Discontinued operations (0.01) 0.30 (0.06) 0.16
Cumulative effect of change
in accounting principle - - (0.08) -
- ----------------------------------------------------------------------------------------------------
$ 0.86 $ (0.53) $ 1.10 $ (1.02)
====================================================================================================
Assuming dilution
Continuing operations $ 0.86 $ (0.83) $ 1.23 $ (1.18)
Discontinued operations (0.01) 0.30 (0.06) 0.16
Cumulative effect of change
in accounting principle - - (0.08) -
- ----------------------------------------------------------------------------------------------------
$ 0.85 $ (0.53) $ 1.09 $ (1.02)
====================================================================================================
Weighted average number of shares outstanding:
Basic 8,785,555 8,571,779 8,713,513 8,564,042
Assuming dilution 8,887,824 8,571,779 8,788,836 8,564,042
====================================================================================================
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
- ---------------------------------------------------------------------------------------
September 30, 2003 December 31, 2002
- ---------------------------------------------------------------------------------------
Assets
Current assets $ 217,654 $ 211,704
- ---------------------------------------------------------------------------------------
Property, plant and equipment 636,363 627,444
Less accumulated depreciation and amortization (236,371) (211,749)
- ---------------------------------------------------------------------------------------
399,992 415,695
Other assets 65,840 74,887
- ---------------------------------------------------------------------------------------
Total Assets $ 683,486 $ 702,286
=======================================================================================
Liabilities and Stockholders' Equity
Current liabilities $ 122,595 $ 120,351
Long-term debt, net of current portion 358,840 398,069
Deferred income taxes 43,252 37,612
Other liabilities 20,980 18,937
Stockholders' equity 137,819 127,317
- ---------------------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity $ 683,486 $ 702,286
=======================================================================================
Certain reclassifications have been made to the year 2002 financial statements to conform
to classifications used in 2003. These reclassifications had no effect on reported earnings
or stockholders' equity.
OPERATING STATISTICS
3 Qtr. 2003 2 Qtr. 2003 1 Qtr. 2003 4 Qtr. 2002 3 Qtr. 2002
- ---------------------------------------------------------------------------------------------------------
Refining
- --------
Four Corners Operations:
Crude Oil/NGL Throughput (BPD) 29,244 31,854 31,146 32,389 30,902
Refinery Sourced Sales Barrels (BPD) 30,147 30,472 31,534 30,006 32,408
Avg. Crude Oil Costs ($/Bbl) $ 28.90 $ 27.90 $ 31.21 $ 26.68 $ 25.96
Refining Margins ($/Bbl) $ 9.51 $ 9.41 $ 8.32 $ 7.64 $ 6.04
Retail Fuel Volumes Sold as a % of Four
Corners Refinery's Sourced Sales Barrels 35% 38% 36% 39% 41%
Yorktown Operations:(1)
Crude Oil/NGL Throughput (BPD) 60,485 52,316 56,256 61,629 54,677
Refinery Sourced Sales Barrels (BPD) 62,937 54,046 59,389 60,911 58,803
Avg. Crude Oil Costs ($/Bbl) $ 28.54 $ 28.06 $ 32.85 $ 27.50 $ 26.57
Refining Margins ($/Bbl) $ 4.61 $ 2.82 $ 4.25 $ 3.21 $ 1.71
Retail(2)
- ---------
Fuel Gallons Sold (000's) 41,254 43,902 42,870 45,053 50,845
Fuel Margins ($/gal) $ 0.21 $ 0.22 $ 0.14 $ 0.15 $ 0.14
Merchandise Sales ($ in 000's) $ 35,387 $ 34,570 $ 30,934 $ 32,981 $ 38,069
Merchandise Margins 29% 30% 31% 27% 28%
Number of Operating Units at End
of Period 127 129 135 136 140
Phoenix Fuel
- ------------
Fuel Gallons Sold (000's) 109,903 105,148 103,037 99,012 94,703
Fuel Margins ($/gal) $ 0.05 $ 0.05 $ 0.05 $ 0.06 $ 0.05
Lubricant Sales ($ in 000's) $ 6,140 $ 6,212 $ 5,615 $ 5,922 $ 5,234
Lubricant Margins 16% 15% 16% 17% 16%
=========================================================================================================
Operating Income (Loss) (in 000's)
- ----------------------------------
Refining - Four Corners Operations $ 13,269 $ 12,715 $ 9,503 $ 7,600 $ 5,816
- Yorktown Operations 10,540 (2,847) 8,358 2,696 (5,994)
Retail(2) 5,052 4,809 1,033 413 1,638
Phoenix Fuel 2,101 2,284 1,606 2,223 1,752
Corporate (6,147) (5,033) (4,924) (4,550) (4,725)
Net (loss) gain on
disposal/write-down of assets(2) (1,272) (150) (273) 1,996 4,961
- ---------------------------------------------------------------------------------------------------------
Total(2) $ 23,543 $ 11,778 $ 15,303 $ 10,378 $ 3,448
=========================================================================================================
Capital Expenditures (in 000's)(3)
- ----------------------------------
Refining - Four Corners Operations $ 654 $ 257 $ 341 $ 344 $ 547
- Yorktown Operations (87) 4,317 4,446 2,418 900
Retail 490 120 254 123 449
Phoenix Fuel 271 129 205 185 87
Corporate 112 55 26 137 248
- ---------------------------------------------------------------------------------------------------------
Total $ 1,440 $ 4,878 $ 5,272 $ 3,207 $ 2,231
=========================================================================================================
(1) The Yorktown Refinery was purchased on May 14, 2002.
(2) Includes discontinued operations.
(3) Excludes Yorktown Refinery acquisition contingent payments in the first three quarters of 2003.
Selected Financial Data
September 30, 2003 December 31, 2002
- ------------------------------------------------------------------------------------
Working Capital (In Millions) $ 95,059 $ 91,353
Current Ratio 1.78:1 1.76:1
Long-Term Debt As A Percent of Total Capital 72.3% 75.8%
Net Debt As A Percent of Total Capital 71.3% 75.3%
Book Value Per Share $ 15.69 $ 14.85
Net cash provided by operating activities(4) $ 53,313 $ 38,068
(4) Net cash provided by operating activities for September 30, 2003 and December 31,
2002 is for nine and twelve months, respectively.
Share Price Data and Dividends (NYSE: GI)
High Low Close Dividends
- --------------------------------------------------------------
2003 3rd Quarter $ 8.10 $ 5.57 $ 7.23 $ --
2003 2nd Quarter $ 6.32 $ 4.42 $ 5.96 $ --
2003 1st Quarter $ 5.50 $ 2.85 $ 4.89 $ --
2002 4th Quarter $ 3.85 $ 1.86 $ 2.95 $ --
2002 3rd Quarter $ 8.13 $ 3.15 $ 3.75 $ --