<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended
March 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13
or 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from_____
to_____
COMMISSION FILE NUMBER 1-1059
CROWN CENTRAL PETROLEUM CORPORATION
(Exact name of registrant as specified
in its charter)
Maryland 52-0550682
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification
Number)
<PAGE>
One North Charles Street,
Baltimore, Maryland 21201
(Address of principal executive offices) (Zip
Code)
Registrant's telephone number,
including area code 410-539-7400
Not Applicable
(Former name, former address
and former fiscal year, if changed
since last report)
Indicate by check mark whether the Registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12
months, and (2) has been subject to such filing
requirements for the past 90 days.
YES ___
X NO __
The number of shares outstanding at April 30, 1996 of the
Registrant's $5 par value Class A and Class B Common Stock
was 4,817,392 shares and 5,120,417 shares, respectively.
- -1-
<PAGE>
CROWN CENTRAL PETROLEUM CORPORATION AND SUBSIDIARIES
Table of Contents
PAGE
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements (Unaudited)
Consolidated Condensed Balance
Sheets March 31, 1996 and
December 31, 1995 ....................3-4
Consolidated Condensed Statements
<PAGE>
of Operations Three months ended
March 31, 1996 and 1995 ................5
Consolidated Condensed Statements
of Cash Flows Three months ended
March 31, 1996 and 1995 ................6
Notes to Unaudited Consolidated
Condensed Financial Statements ......7-11
Item 2 - Management's Discussion and Analysis
of Financial Condition and Results
of Operations ......................12-15
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings .....................16
Item 6 - Exhibits and Reports on Form 8-K ......16
Exhibit 3 - Articles of Incorporation and Bylaws
Exhibit 11 - Statement re: Computation
of Earnings Per Share
Exhibit 20 - Interim Report to
Stockholders for the three
months ended March 31, 1996
Exhibit 27 - Financial Data Schedule
SIGNATURE ......................................16
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<PAGE>
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
<TABLE>
<CAPTION>
CONSOLIDATED CONDENSED BALANCE SHEETS
Crown Central Petroleum Corporation and Subsidiaries
(Thousands of dollars)
March 31 December 31
1996 1995
---------- -------------
Assets (Unaudited)
<S> <C> <C>
<PAGE>
Current Assets
Cash and cash equivalents ..... $ 18,258 $ 42,045
Accounts receivable - net ..... 123,702 105,799
Recoverable income taxes ... 2,327 4,137
Inventories ................... 113,193 96,025
Other current assets .......... 8,357 2,595
--------- ---------
Total Current Assets ........ 265,837 250,601
Investments and Deferred Charges . 34,737 30,633
Property, Plant and Equipment .... 630,011 624,338
Less allowance for depreciation 327,718 322,358
--------- ---------
Net Property, Plant and Equipment 302,293 301,980
--------- ---------
$ 602,867 $ 583,214
========= =========
<FN>
See notes to unaudited consolidated condensed financial statements.
</TABLE>
- -3-
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED CONDENSED BALANCE SHEETS
Crown Central Petroleum Corporation and Subsidiaries
(Thousands of dollars)
March 31 December 31
Liabilities and Stockholders' Equity 1996 1995
---------- -----------
(Unaudited)
<S> <C> <C>
Current Liabilities
Accounts payable:
Crude oil and refined products . $ 161,121 $ 112,036
Other ......................... 16,735 24,287
Accrued liabilities .............. 60,182 66,788
Current portion of
long-term debt ................. 1,346 1,559
<PAGE>
--------- ---------
Total Current Liabilities .... 239,384 204,670
Long-Term Debt ..................... 128,185 128,506
Deferred Income Taxes .............. 23,084 27,995
Other Deferred Liabilities ......... 35,643 32,548
Common Stockholders' Equity
Common stock, Class A - par value
$5 per share: Authorized shares
--7,500,000; issued and
outstanding shares--4,817,392
in 1996 and 1995 ............... 24,087 24,087
Common stock, Class B - par value
$5 per share: Authorized shares
--7,500,000; issued and
outstanding shares--5,106,858
in 1996 and 5,135,558 in
1995 .......................... 25,534 25,678
Additional paid-in capital ...... 92,583 92,249
Unearned restricted stock ....... (3,837) (3,733)
Retained earnings ............... 38,204 51,214
--------- ---------
Total Common Stockholders'
Equity .................... 176,571 189,495
--------- ---------
$ 602,867 $ 583,214
========= =========
<FN>
See notes to unaudited consolidated condensed financial statements.
</TABLE>
- -4-
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
Crown Central Petroleum Corporation and Subsidiaries
(Thousands of dollars, except per share amounts)
(Unaudited)
Three Months Ended March 31
1996 1995
----------- -----------
<S> <C> <C>
<PAGE>
Revenues
Sales and operating revenues .... $ 371,091 $ 344,833
Operating Costs and Expenses
Costs and operating expenses .... 355,138 321,573
Selling and administrative expenses 23,268 20,005
Depreciation and amortization ... 7,977 9,492
Sales of property, plant and
equipment 22 243
--------- ----------
386,405 351,313
--------- ----------
Operating (Loss) .................. (15,314) (6,480)
Interest and other income ......... 866 748
Interest expense .................. (3,562) (3,475)
--------- ----------
(Loss) Before Income Tax (Benefit) (18,010) (9,207)
Income Tax (Benefit) .............. (5,000) (2,289)
--------- ----------
(Loss) Before Extraordinary Item .. (13,010) (6,918)
Extraordinary (Loss) from Early
Extinguishment of Debt (net of
income tax benefit of $2,039) ... (3,257)
--------- ----------
Net (Loss) ........................ $ (13,010) $ (10,175)
========= ==========
Net (Loss) Per Share:
Loss) Before Extraordinary Item . $ (1.34) $ (.71)
Extraordinary (Loss) from Early
Extingiushment of Debt .......... (.33)
--------- ----------
Net (Loss) Per Share .............. $ (1.34) $ (1.04)
========= ==========
<FN>
See notes to unaudited consolidated condensed financial statements.
</TABLE>
- -5-
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
Crown Central Petroleum Corporation and Subsidiaries
<PAGE>
(Thousands of dollars)
(Unaudited)
Three Months Ended March 31
1996 1995
---------- ----------
<S> <C> <C>
Net Cash Flows From
Operating Activities
Net cash from operations before
changes in working capital ...... $ (6,666) $ 1,636
Net changes in working capital items (4,096) (15,215)
---------- ----------
Net Cash (Used in) Operating
Activities .................... (10,762) (13,579)
---------- ----------
Cash Flows From Investment Activities
Capital expenditures ............... (7,405) (6,602)
Proceeds from sales of property,
plant and equipment .............. 142 406
Deferred turnaround maintenance .... (3,376) (1,750)
Other charges to deferred assets ... (1,381) (2,442)
---------- ----------
Net Cash (Used in) Investment
Activities .................... (12,020) (10,388)
Cash Flows From Financing Activities
Proceeds from debt and credit
agreement borrowings ............. 142,887
(Repayments) of debt and credit
agreement borrowings ............. (540) (121,567)
Net cash flows from long-term
notes receivable ................. (558) 72
Issuance of common stock ........... 93
---------- -----------
Net Cash (Used in) Provided by
Financing Activities ........... (1,005) 21,392
---------- -----------
Net (Decrease) in Cash and
Cash Equivalents ................... $ (23,787) $ (2,575)
========= ==========
<FN>
See notes to unaudited consolidated condensed financial statements.
</TABLE>
- -6-
<PAGE>
<PAGE>
NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL
STATEMENTS
Crown Central Petroleum Corporation and Subsidiaries
March 31, 1996
Note A - Basis of Presentation
The accompanying unaudited consolidated condensed financial
statements have been prepared in accordance with generally
accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Rule
10-01 of Regulation S-X. Accordingly, they do not include
all of the information and footnotes required by generally
accepted accounting principles for complete financial
statements. In the opinion of Management, all adjustments
considered necessary for a fair and comparable presentation
have been included. Operating results for the three months
ended March 31, 1996 are not necessarily indicative of the
results that may be expected for the year ending December
31, 1996. The enclosed financial statements should be read
in conjunction with the consolidated financial statements
and footnotes thereto included in the Company's annual
report on Form 10-K for the year ended December 31, 1995.
Use of Estimates - The preparation of financial statements
in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those
estimates.
Cash and Cash Equivalents - Cash in excess of daily
requirements is invested in marketable securities with
maturities of three months or less. Such investments are
deemed to be cash equivalents for purposes of the
statements of cash flows.
Inventories - The Company's crude oil, refined products,
and convenience store merchandise and gasoline inventories
are valued at the lower of cost (last-in, first-out) or
market with the exception of crude oil inventory held for
resale which is valued at the lower of cost (first-in,
first-out) or market. Materials and supplies inventories
are valued at cost. Incomplete exchanges of crude oil and
refined products due the Company or owing to other
companies are reflected in the inventory accounts.
At March 31, 1996, approximately 1,662,000 barrels of crude
oil and refined products, or approximately $46.4 million of
inventory, were held in excess of anticipated year-end
quantities, excluding crude oil held for resale, and were
valued at the lower of cost (first-in, first-out) or
<PAGE>
market. An actual valuation of inventory under the LIFO
method can be made only at the end of each year based on
the inventory levels and costs at that time. Accordingly,
interim LIFO projections must be based on Management's
estimates of expected year-end inventory levels and values.
Environmental Costs - The Company conducts environmental
assessments and remediation efforts at multiple locations,
including operating facilities, and previously owned or
operated facilities. Estimated closure and post-closure
costs for active refinery and finished product terminal
facilities are not recognized until a decision for closure
is made. Estimated closure and post-closure costs for
active operating retail marketing facilities and costs of
environmental matters related to ongoing refinery, terminal
and retail marketing operations are recognized as described
below. Expenditures for equipment necessary for
environmental issues relating to ongoing operations are
capitalized. The Company accrues environmental and clean-
up related costs of a non-capital nature when it is both
probable that a liability has been incurred and the amount
can be reasonably estimated. Accruals for losses from
environmental remediation obligations generally are
recognized no later than completion of the remediation
feasibility study. Estimated costs, which are based upon
experience and assessments, are recorded at undiscounted
amounts without considering the impact of inflation, and
are adjusted periodically as additional or new information
is available.
- -7-
<PAGE>
Financial Instruments and Hedging Activities - The Company
periodically enters into interest rate swap agreements to
effectively manage the cost of borrowings. All interest
rate swaps are subject to market risk as interest rates
fluctuate. Interest rate swaps are designated to the
Company's long-term debt and are accounted for as a hedge,
the net amounts payable or receivable from periodic
settlements under outstanding interest rate swaps are
included in interest expense. Realized gains and losses
from terminated interest rate swaps are deferred and
amortized into interest expense over the shorter of the
term of the underlying debt or the remaining term of the
original swap agreement. Settlement of interest rate swaps
involves the receipt or payment of cash on a periodic basis
during the duration of the contract, or upon the Company's
termination of the contract, for the differential of the
interest rates swapped over the term of the contract.
Other instruments are used to minimize the exposure of the
Company's refining margins to crude oil and refined product
price fluctuations. Hedging strategies used to minimize
<PAGE>
this exposure include fixing a future margin between crude
oil and certain finished products and also hedging fixed
price purchase and sales commitments of crude oil and
refined products. Futures, forwards and exchange traded
options entered into with commodities brokers and other
integrated oil and gas companies are utilized to execute
the Company's strategies. These instruments generally
allow for settlement at the end of their term in either
cash or product.
Net realized gains and losses from these hedging strategies
are recognized in costs and operating expenses when the
associated refined products are sold. Unrealized gains and
losses represent the difference between the market price of
refined products and the price of the derivative financial
instrument, inclusive of refining costs. Individual
transaction unrealized gains and losses are deferred in
inventory and other current assets and liabilities to the
extent that the associated refined products have not been
sold. A hedging strategy position generating an overall
net unrealized loss is recognized in costs and operating
expenses. The Company's hedging activities are intended to
reduce volatility while providing an acceptable profit
margin on a portion of production. However, the use of such
a program can limit the Company's ability to participate in
an improvement in related refined product profit margins.
Credit Risk - The Company is potentially subjected to
concentrations of credit risk with accounts receivable,
interest rate swaps, and futures, forwards and exchange
traded options for crude oil and finished products.
Because the Company has a large and diverse customer base
with no single customer accounting for a significant
percentage of accounts receivable, there was no material
concentration of credit risk in these accounts at March 31,
1996. The Company evaluates the credit worthiness of the
counterparties to interest rate swaps, and futures,
forwards and exchange traded options and considers non-
performance credit risk to be remote. The amount of
exposure with such counterparties is generally limited to
unrealized gains on outstanding contracts.
Statements of Cash Flows - Net changes in working capital
items presented in the Unaudited Consolidated Condensed
Statements of Cash Flows reflects changes in all current
assets and current liabilities with the exception of cash
and cash equivalents and the current portion of long-term
debt.
Reclassifications - To conform to the 1996 presentation,
Sales and operating revenues and Costs and operating
expenses for the three months ended March 31, 1995 have
been adjusted to exclude all federal and state excise
taxes. As a result, Sales and operating revenues and Costs
and operating expenses decreased $100,591,000 for the first
quarter of 1995 from the numbers originally reported. This
adjustment had no effect on net loss for the period.
<PAGE>
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<PAGE>
<TABLE>
<CAPTION>
Note B - Inventories
Inventories consist of the following:
March 31 December 31
1996 1995
---------- -----------
(thousands of dollars)
<S> <C> <C>
Crude oil ..................... $ 70,617 $ 58,047
Refined products .............. 89,532 77,342
-------- --------
Total inventories at FIFO
(approximates current cost). 160,149 135,389
LIFO allowance ................ (60,091) (52,301)
-------- --------
Total crude oil and refined
products .................. 100,058 83,088
-------- --------
Merchandise inventory at FIFO
(approximates current cost) . 6,412 6,453
LIFO allowance ................ (1,674) (1,674)
-------- --------
Total merchandise ........... 4,738 4,779
-------- --------
Materials and supplies inventory
at FIFO ..................... 8,397 8,158
-------- --------
Total Inventory ............. $113,193 $ 96,025
======== ========
</TABLE>
<TABLE>
<CAPTION>
Note C - Long-term Debt and Credit Arrangements
Long-term debt consists of the following:
March 31 December 31
1996 1995
---------- -----------
(thousands of dollars)
<S> <C> <C>
Unsecured 10 7/8% Senior Notes ..... $124,724 $124,716
<PAGE>
Purchase Money Lien ................ 4,209 4,492
Other obligations .................. 598 856
-------- --------
129,531 130,064
Less current portion ............... 1,346 1,558
-------- --------
Long-Term Debt ................... $128,185 $128,506
======== ========
</TABLE>
As of May 14, 1996, under the terms of the unsecured
revolving Credit Agreement effective as of September 25,
1995 (Credit Agreement), which is used solely for the
purpose of financing the working capital requirements of
the Company, the Company had outstanding irrevocable
standby letters of credit in the principal amount of $20.4
million for performance obligations related to
environmental and insurance matters, cash borrowings of $10
million and unused commitments available for future cash
borrowings and letters of credit totaling $99.6 million.
As of March 31, 1996, the Company was in compliance with
all covenants and provisions of the Credit Agreement and
forecasts that, but there can be no assurance that, it will
remain in compliance for the remainder of the year. The
$125 million unsecured 10.875% Senior Notes (Notes), which
were issued under an Indenture (Indenture) are used
principally to finance the permanent capital requirements
of the Company. As of March 31, 1996, the Company was in
compliance with the terms of the Indenture. The Indenture
includes certain restrictions and limitations customary
with senior indebtedness of this type which limit the
amount of additional indebtedness the Company may incur
outside of the Credit Agreement and under certain
circumstances restrict the Company from declaring
dividends. As of March 31, 1996, the Indenture
substantially restricted the Company from effecting
borrowings outside of the Credit Agreement and precluded
the Company from paying any dividends. The Company has not
paid a dividend on its shares of common stock since the
first quarter of 1992. The Company expects that, but there
can be no assurance that, by the fourth quarter of 1996,
due to improved operating results, the Indenture will no
longer substantially restrict the Company from effecting
borrowings outside of the Credit Agreement.
- -9-
<PAGE>
Note D - Crude Oil and Refined Product Hedging Activities
and Other Derivative Financial Instruments
The net deferred loss from crude oil and refined product
hedging strategies at March 31, 1996 was $3.9 million.
<PAGE>
Included in these hedging strategies are contracts maturing
from May 1996 to February 1997. The amount of estimated
crude requirements and estimated finished product sales
hedged at March 31, 1996 was not material.
There were no interest rate swap agreements outstanding at
any time during the first quarter of 1996. At March 31,
1996, the Company has recorded a deferred gain of $1.1
million related to canceled interest rate swap agreements
which will be amortized into income over the remaining
terms of the original swap agreements ranging from 1996 to
1998. The Company may utilize interest rate swaps in the
future to further manage the cost of funds.
Note E - Calculation of Net (Loss) Income Per Common Share
Net (loss) per common share for the three months ended
March 31, 1996 and 1995 is based on the weighted average of
common shares outstanding of 9,700,083 and 9,697,598,
respectively.
Note F--Long-Term Incentive Plan and Stock Option Plan
Under the terms of the 1994 Long-term Incentive Plan
(Plan), the Company may distribute to selected employees
restricted shares of the Company's Class B Common Stock and
options to purchase Class B Common Stock. Up to 1.1
million shares of Class B Common Stock may be distributed
under the Plan. The balance sheet caption "Unearned
restricted stock" is charged for the market value of
restricted shares at their grant date and changes in the
market value of shares outstanding until the vesting date,
and is shown as a reduction of stockholders' equity. The
impact is further reflected within Class B Common Stock and
Additional paid-in-capital.
Performance Vested Restricted Stock (PVRS) awards are
subject to the attainment of performance goals and certain
restrictions including the receipt of dividends and
transfers of ownership. Beginning with grants made in 1996,
shares not awarded relative to the attainment of
performance goals will be awarded upon the completion of a
5 year service requirement. As of March 31, 1996, 219,300
shares of PVRS have been registered in participants names
and are being held by the Company subject to the attainment
of the related performance goals.
Under the 1994 Long-term Incentive Plan, non-qualified
stock options are granted to participants at a price not
less than 100% of the fair market value of the stock on the
date of grant. The exercise period is ten years with the
options vesting one-third per year over three years after a
one-year waiting period. As of March 31, 1996, grants of
non-qualified stock options have been awarded to
<PAGE>
participants to purchase 547,873 shares of the Company's
Class B Common Stock.
Under the terms of the 1995 Management Stock Option Plan, a
maximum of 500,000 shares of Class B Common Stock was
available for distribution. The Company awarded to
participants non-qualified stock options to purchase
461,760 shares of the Company's Class B Common Stock at a
price equal to 100% of the fair market value of the stock
at the date of grant. The exercise period is ten years
with the options vesting one-third per year over three
years after a one-year waiting period.
Shares of Class B Common Stock available for issuance under
options or awards amounted to 371,067 at
March 31, 1996.
[This space intentionally left blank]
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<PAGE>
<TABLE>
<CAPTION>
Detail of the Company's stock options are as follows:
Shares per share
------------ ---------------
<S> <C> <C>
1994 Long-Term Incentive Plan
- -----------------------------
Granted - 1994 ............... 109,800 $16.13-$16.88
Canceled - 1994 .............. (950) $16.88
----------
Outstanding -
December 31, 1994 ......... 108,850 $16.13-$16.88
Granted - 1995 ............... 396,150 $12.81-$13.75
----------
Outstanding -
December 31, 1995 ......... 505,000 $12.81-$16.88
Granted - 1996 ............... 101,800 $17.06-$17.69
Exercised - 1996 ............. (7,300) $12.81
Canceled - 1996 .............. (58,937) $12.81-$16.88
----------
Outstanding - March 31, 1996 ... 540,573 $12.81-$17.69
==========
<PAGE>
Shares Exercisable
at March 31, 1996 .......... 96,943 $12.81-$16.88
==========
1995 Management Stock Option Plan
---------------------------------
Granted - 1995 ............... 461,760 $13.75-$16.06
----------
Outstanding - March 31, 1996 461,760 $13.75-$16.06
==========
Total outstanding -
March 31, 1996 ............... 1,0002,333 $12.81-$17.69
==========
</TABLE>
Note G - Litigation and Contingencies
Except as disclosed in this note, there have been no
material changes in the status of litigation and
contingencies as discussed in Note I of Notes to
Consolidated Financial Statements in the Annual Report on
Form 10-K for the fiscal year ended December 31, 1995.
Like other petroleum refiners and marketers, the Company's
operations are subject to extensive and rapidly changing
federal and state environmental regulations governing air
emissions, waste water discharges, and solid and hazardous
waste management activities. The Company's policy is to
accrue environmental and clean-up related costs of a non-
capital nature when it is both probable that a liability
has been incurred and the amount can be reasonably
estimated. While it is often extremely difficult to
reasonably quantify future environmental related
expenditures, the Company anticipates that a substantial
capital investment will be required over the next several
years to comply with existing regulations. The Company has
recorded a liability of approximately $16.4 million as of
March 31, 1996 relative to the estimated costs of a non-
capital nature related to compliance with environmental
regulations. This liability is anticipated to be expended
over the next five years. While certain recoveries from
various state environmental funds are reasonably
anticipated based upon prior experience, no amounts have
been accrued as receivables for potential reimbursement or
recoveries to offset this liability. Included in costs and
operating expenses in the statements of operations for the
three months ended March 31, 1996 and 1995 were costs
related to environmental remediation in the amounts of $.4
million and $.7 million, respectively.
Environmental liabilities are subject to considerable
uncertainties which affect the Company's ability to
estimate its ultimate cost of remediation efforts. These
uncertainties include the exact nature and extent of the
contamination at each site, the extent of required cleanup
<PAGE>
efforts, varying costs of alternative remediation
strategies, changes in environmental remediation
requirements and processes, the number and strength of
other potentially responsible parties at multi-party sites,
and the identification of new environmental sites. It is
possible that the ultimate cost, which cannot be determined
at this time, could exceed the Company's recorded
liability. As a result, charges to income for
environmental liabilities could have a material effect on
the results of operations in a particular quarter or year
as assessments and remediation efforts proceed or as new
claims arise. However, management is not aware of any
matters which would be expected to have a material adverse
effect on the Company.
- -11-
<PAGE>
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations
Results of Operations
The Company's Sales and operating revenues increased $26.3
million or 7.6% in the first quarter of 1996 from the
comparable period in 1995. The increase in Sales and
operating revenues was primarily attributable to a 7%
increase in the average sales price per gallon of petroleum
products and a .7% increase in petroleum product sales
volumes. Additionally, there was a slight increase in
merchandise sales of .6%.
Merchandise gross margin (merchandise gross profit as a
percent of merchandise sales) increased from 25.2% to 27.1%
for the three months ended March 31, 1995 and 1996,
respectively. The increase in gross margin is a result of
the Company's merchandise pricing program designed to
increase per unit customer traffic and overall merchandise
sales and gasoline volumes. A key element of the program
includes the reduction of prices on certain items such as
tobacco products and beverages. This marketing strategy
has resulted in average monthly gasoline sales volume and
merchandise sales increases on a same store basis of
approximately 1.9% and 3.9%, respectively, and has
contributed to the $.4 million or 8.1% increase in
merchandise gross profit. Aggregate merchandise gross
profit on a same store basis increased by 11.4% in the
first quarter of 1996 compared to the same 1995 period.
Costs and operating expenses increased $33.6 million or
10.4% in the first quarter of 1996 compared to the same
period in 1995. The increase was due to a 9.3% increase in
the average cost per barrel consumed of crude oil and
feedstocks and to slight increases in volumes sold as
previously mentioned. The results of operations were
<PAGE>
significantly affected by the Company's use of the LIFO
method to value inventory which decreased the Company's
gross margin $.57 per barrel ($7.8 million) in 1996, and
$.10 per barrel ($1.3 million) in 1995.
In the first quarter of 1996, the Company has adjusted its
gasoline and distillate production to take advantage of
better distillate margins compared to gasoline margins.
Correspondingly, yields of distillates were increased to
46,300 bpd (31.9%) compared to 42,700 bpd (28.0%) in 1995,
while gasoline production were decreased from 97,000 bpd
(63.6%) in 1995 to 85,500 bpd (58.9%) in 1996.
A majority of the Company's total crude oil and related raw
material purchases are transacted on the spot market. The
Company continues to selectively enter into forward hedging
contracts to minimize price fluctuations for a portion of
its crude oil and refined products.
Selling and administrative expenses increased $3.3 million
or 16.3% for the three months ended March 31, 1996 as
compared to the same period in 1995. The increase is
principally due to increases in store level operating
expenses and to approximately $1 million in corporate
administrative expenses associated with a recent management
reorganization.
Operating costs and expenses in the first quarter of 1996
and 1995 included $.4 million and $.7 million,
respectively, related to environmental matters and $.1
million and $.6 million, respectively related to retail
units that have been closed.
Depreciation and amortization decreased $1.5 million or 16%
in the first quarter of 1996 compared to the same 1995
period. The 1996 decrease was primarily the result of a
reduction in the depreciable base of the Tyler refinery
assets due to the adoption of SFAS No. 121 ``Accounting for
the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of'' effective October 1, 1995.
In the first quarter of 1995, the Company completed the
sale of $125 million of Unsecured 10.875% Senior Notes due
February 1, 2005 priced at 99.75% (Notes). Approximately
$55 million of the net proceeds from the sale were used to
retire the Company's outstanding 10.42% Senior Notes,
including a prepayment premium of $3.4 million. The
remaining portion of the outstanding 10.42% Senior Notes
had been paid on January 3, 1995 as part of the regularly
scheduled debt service. In the first quarter of 1995, the
Company recorded an extraordinary loss of $3.3 million
(net of income tax benefits of $2 million) consisting of
redemption related premiums and the write-off of deferred
financing costs associated with the 10.42% Senior Notes.
<PAGE>
- -12-
<PAGE>
Liquidity and Capital Resources
Net cash used in operating activities (including changes in
working capital) totaled $10.8 million for the three months
ended March 31, 1996 compared to cash used in operating
activities of $13.6 million for the three months ended
March 31, 1995. The 1996 outflows consist primarily of cash
used in operations of $6.7 million and $4.1 million related
to working capital requirements resulting from increases in
accounts receivable and in the value of crude oil and
finished products inventories. Additionally, there were
increases in prepaid operating expenses, principally
relating to insurance premiums and property taxes, and
decreases in other accounts payable and in accrued income
and excise tax liabilities. Partially offsetting these
working capital outflows were increases in crude oil and
refined products payables and decreases in recoverable
income taxes. The 1995 outflows consist of $15.2 million
in cash outflows related to working capital requirements
resulting from decreases in crude oil, refined products and
other payables. Additionally, there were increases in
prepaid operating expenses and in the current income tax
asset. These working capital outflows were partially
offset by decreases in accounts receivable and in the value
of crude oil and finished product inventories. Partially
offsetting these cash outflows was cash provided by
operations of $1.6 million.
Net cash outflows from investment activities were $12
million for the first quarter of 1996 compared to a net
outflow of $10.4 million for the same 1995 period. The
1996 amount consists principally of capital expenditures of
$7.4 million (which includes $4.5 million for refinery
operations and $1.7 million relating to the marketing
area). Additionally, there were increases in refinery
turnaround expenditures of $3.4 million and increases in
other deferred assets of $1.4 million. The 1995 activity
relates primarily to $6.6 million of capital expenditures
($3.4 million relating to refinery operations and $3.2
relating to the marketing area). In addition, there were
increases in other deferred assets of $2.4 million, which
consists primarily of $2.9 million in loan placement fees
related to the sale of $125 million of unsecured 10.875%
Senior Notes in January 1995, and refinery turnaround
expenditures of $1.8 million. The 1995 cash outflows were
partially offset by proceeds from the sale of property,
plant and equipment of $.4 million.
Net cash used in financing activities was $1 million for
the three months ended March 31, 1996 compared to cash
provided by financing activities of $21.4 million for the
three months ended March 31, 1995. The 1996 cash outflows
consist principally of $.5 million in repayments of the
<PAGE>
Company's debt and credit agreement borrowings and
increases of $.6 million in long-term notes receivable.
These cash outflows were partially offset by proceeds of
$.1 million received from the issuance of the Company's
Class B Common Stock resulting from exercises of non-
qualified stock options granted to participants of the
Long-Term Incentive Plan. The 1995 cash inflows relate to
$21.3 million in net proceeds received from debt and credit
agreement borrowings due primarily to the sale in January
1995 of $125 million of unsecured 10.875% Senior Notes net
of amounts used to repay outstanding balances relating to
the 10.42% Senior Notes (including a prepayment premium)
and credit agreement borrowings.
Cash and cash equivalents at March 31, 1996 were $34
million lower than at March 31, 1995. This decrease
resulted primarily from cash used in investment activities
of $39.1 million, which includes capital expenditures of
$41.8 million, net of $6.1 million of proceeds received
from the sale of property, plant and equipment, and
deferred turnaround charges of $14.6 million. These cash
outflows were partially offset by an increase in cash of
$6.8 million resulting from the consolidation of the
Company's wholly-owned insurance subsidiaries in the fourth
quarter of 1995 and decreases in other deferred assets due
primarily to the write-off of Tyler refinery deferred
turnaround charges and goodwill resulting from the adoption
of Statement of Financial Accounting Standards No. 121
``Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed Of'' effective October
1, 1995. Additionally, cash used in financing activities
amounted to $2 million for the period April 1, 1995 to
March 31, 1996 relating primarily to net repayments of the
Company's debt and credit agreement borrowings of $1.9
million. These cash outflows were partially offset by
cash provided by operations of $14.7 million, net of $7.7
million used for working capital purposes for the twelve
month period ended March 31, 1996.
- -13-
<PAGE>
The ratio of current assets to current liabilities at March
31, 1996 was 1.11:1 compared to 1.41:1 at March 31, 1995
and 1.22:1 at December 31, 1995. If FIFO values had been
used for all inventories, assuming an incremental effective
income tax rate of 38.5%, the ratio of current assets to
current liabilities would have been 1.37:1 at March 31,
1996, 1.52:1 at March 31, 1995 and 1.35:1 at December 31,
1995.
Like other petroleum refiners and marketers, the Company's
operations are subject to extensive and rapidly changing
federal and state environmental regulations governing air
<PAGE>
emissions, waste water discharges, and solid and hazardous
waste management activities. The Company's policy is to
accrue environmental and clean-up related costs of a non-
capital nature when it is both probable that a liability
has been incurred and that the amount can be reasonably
estimated. While it is often extremely difficult to
reasonably quantify future environmental related
expenditures, the Company anticipates that a substantial
capital investment will be required over the next several
years to comply with existing regulations. The Company
believes that cash provided from its operating activities,
together with other available sources of liquidity,
including borrowings under the Credit Agreement, will be
sufficient to fund these costs. The Company had recorded a
liability of approximately $16.4 million as of March 31,
1996 to cover the estimated costs of compliance with
environmental regulations which are not anticipated to be
of a capital nature. The liability of $16.4 million
includes accruals for issues extending past 1997.
Environmental liabilities are subject to considerable
uncertainties which affect the Company's ability to
estimate its ultimate cost of remediation efforts. These
uncertainties include the exact nature and extent of the
contamination at each site, the extent of required cleanup
efforts, varying costs of alternative remediation
strategies, changes in environmental remediation
requirements, the number and financial strength of other
potentially responsible parties at multi-party sites, and
the identification of new environmental sites. As a
result, charges to income for environmental liabilities
could have a material effect on results of operations in a
particular quarter or year as assessments and remediation
efforts proceed or as new claims arise. However,
management is not aware of any matters which would be
expected to have a material adverse effect on the Company.
During the years 1996-1998, the Company estimates
environmental expenditures at the Pasadena and Tyler
refineries of at least $6.9 million and $13.5 million,
respectively. Of these expenditures, it is anticipated
that $4.4 million for Pasadena and $8.1 million for Tyler
will be of a capital nature, while $2.5 million and $5.4
million, respectively, will be related to previously
accrued non-capital remediation efforts. At the Company's
marketing facilities, capital expenditures relating to
environmental improvements are planned totaling
approximately $25.5 million through 1998.
The Company's principle purchases (crude oil and
convenience store merchandise) are transacted primarily
under open lines of credit with its major suppliers. The
Company maintains two credit facilities to finance its
business requirements and supplement internally generated
sources of cash.
<PAGE>
The $130 million unsecured revolving Credit Agreement dated
as of September 25, 1995 (Credit Agreement) is used solely
for the purpose of financing the working capital
requirements of the Company. As of May 14, 1996, the
Company had outstanding irrevocable standby letters of
credit in the principal amount of $20.4 million for
performance obligations related to environmental and
insurance matters, cash borrowings of $10 million and
unused commitments available for future cash borrowings and
letters of credit totaling $99.6 million. As of March 31,
1996, the Company was in compliance with all covenants and
provisions of the Credit Agreement and forecasts that, but
there can be no assurance that, it will remain in
compliance for the remainder of the year.
The $125 million unsecured 10.875% Senior Notes (Notes) due
January 25, 2005 require semi-annual interest payments.
There are no sinking fund requirements on the Notes. This
facility is principally used to finance the permanent
capital requirements of the Company and, to the extent
required, working capital. At the Company's option, up to
$37.5 million of the Notes may be redeemed at 110.875% of
the principal amount at any time prior to February 1, 1998.
After such date, they may not be redeemed until February
1, 2000 when they are redeemable at 105.438% of the
principal amount, and thereafter at an annually declining
premium over par until February 1, 2003 when they are
redeemable at par. The Notes were issued under an
Indenture which includes certain restrictions and
limitations customary with senior indebtedness. These
restrictions and limitations include, but are not limited
to, restrictions on the incurrence of additional
indebtedness, on the payment of dividends and on the
repurchase of capital stock. These restrictions and
limitations are not applicable to letter of credit
availability and up to $50 million of cash borrowings
provided by the Credit Agreement. As of March 31, 1996,
the Indenture
- -14-
<PAGE>
substantially restricted the Company from effecting
borrowings outside of the Credit Agreement and precluded
the Company from paying any dividends. The Company has not
paid a dividend on its shares of common stock since the
first quarter of 1992. The Company expects that, but there
can be no assurance that, by the fourth quarter of 1996,
due to improved operating results, the Indenture will no
longer substantially restrict the Company from effecting
borrowings outside of the Credit Agreement. As outlined in
the Company's planned capital requirements described below,
while the Company is limited by the Indenture from
effecting borrowings outside of the Credit Agreement, it
does not currently plan to effect any borrowings outside of
the Credit Agreement.
<PAGE>
The Company's management is involved in a continual process
of evaluating growth opportunities in its core business as
well as its capital resource alternatives. Total capital
expenditures and deferred turnaround costs in 1996 are
projected to approximate $50 million. The capital
expenditures relate primarily to planned enhancements at
the Company's refineries, retail unit improvements and to
company-wide environmental requirements. The Company
believes that cash provided from its operating activities,
together with other available sources of liquidity,
including the remaining proceeds of the $125 million of
Unsecured 10.875% Senior Notes (Notes) and the Credit
Agreement, will be sufficient over the next year to make
required payments of principal and interest on its debt,
including interest payments due on the Notes, permit
anticipated capital expenditures and fund the Company's
working capital requirements.
The Company places its temporary cash investments in high
credit quality financial instruments which are in
accordance with the covenants of the Company's financing
agreements. These securities mature within ninety days,
and, therefore, bear minimal risk. The Company has not
experienced any losses on its investments.
The Company faces intense competition in all of the
business areas in which it operates. Many of the Company's
competitors are substantially larger and therefore, the
Company's earnings can be affected by the marketing and
pricing policies of its competitors, as well as changes in
raw material costs.
Merchandise sales and operating revenues from the Company's
convenience stores are seasonal in nature, generally
producing higher sales and net income in the summer months
than at other times of the year. Gasoline sales, both at
the Crown multi-pumps and convenience stores, are also
somewhat seasonal in nature and, therefore, related
revenues may vary during the year. The seasonality does
not, however, negatively impact the Company's overall
ability to sell its refined products.
The Company maintains business interruption insurance to
protect itself against losses resulting from shutdowns to
refinery operations from fire, explosions and certain other
insured casualties. Business interruption coverage begins
for such losses at the greater of $5 million or shutdowns
for periods in excess of 25 days.
As discussed in Item 3. Legal Proceedings of the Annual
Report on Form 10-K for the fiscal year ended December 31,
1995, the Company's collective bargaining agreement at its
Pasadena refinery expired on February 1, 1996, and on
February 5, 1996, the Company invoked a lock-out of
employees in the collective bargaining unit. The Company
has been operating the Pasadena refinery without
<PAGE>
interruption since the lock-out with management and
supervisory personnel and intends to continue full
operations until an agreement is reached with the
collective bargaining unit. The Oil, Chemical & Atomic
Workers Union (OCAW) filed unfair labor practice charges
against the Company in connection with the lock-out. The
Regional Office of the National Labor Relations Board
(NLRB) has dismissed the charges; and; accordingly, no
accruals related to back wages have been recorded. The
union has appealed the NLRB ruling; the Company intends to
continue to vigorously contest the matter.
- -15-
<PAGE>
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
There have been no material changes in the status of legal
proceedings as reported in Item 3 of the Company's Annual
Report on Form 10-K for the fiscal year ended December 31,
1995.
The unfair labor practice charges filed by the Oil,
Chemical & Atomic Workers Union in connection with the
lock-out of employees in the collective unit at the
Pasadena refinery, which was previously reported in the
Annual Report on Form 10-K for the year ended December 31,
1995, were dismissed by the Regional Office of the National
Labor Relations Board. The union has appealed this ruling.
The Company intends to continue to vigorously contest the
matter.
The Company is involved in various matters of litigation,
the ultimate determination of which, in the opinion of
management, is not expected to have a material adverse
effect on the Company.
Item 4 - Submission of Matters to a vote of Security
Holders
(a) Security holders voted upon a recommendation
of the Board of Directors to approve the
Articles of Amendment and Restatement of
Charter (Articles of Amendment). The
Articles of Amendment: (i) increased the
number of Class A Common Stock and Class B
Common Stock the Company is authorized to
issue, from 7,500,000 shares to 15,000,000
shares of each class; (ii) eliminated the
designation of the Company's Series A
Cumulative Convertible Preferred Stock and
Series B $2.25 Cumulative Convertible
<PAGE>
Exchangeable Preferred Stock; (iii) require
indemnification of directors and officers of
the Corporation to the maximum extent
permitted by Maryland Law; and (iv) effect
certain other changes to the Company's
Charter. The recommendation was approved by
the security holders at the Annual Meeting
of Security Holders held on April 25, 1996
by a vote of 4,216,862 shares in the
affirmative. 275,806 shares voted in the
negative, and there were 7,945 abstentions
and 362,702 broker non-votes.
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibit:
3 - Articles of Incorporation and Bylaws
(i) Amended and Restated Charter of Crown
Central Petroleum Corporation was
previously filed with the Registrant's
Proxy Statement dated March 15, 1996 for
the Annual Meeting of Stockholders held
on April 25, 1996 as Exhibit A of
Appendix A, herein incorporated by
reference
11 - Statement re: Computation of
Earnings Per Share
20 - Interim Report to Stockholders for
the three months ended
March 31, 1996
27 - Financial Data Schedule
(b) Reports on Form 8-K:
- -16-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report on
Form 10-Q for the quarter ended March 31, 1996 to be signed
on its behalf by the undersigned thereunto duly authorized.
<PAGE>
CROWN CENTRAL PETROLEUM CORPORATION
/s/---Patrick D. McCafferty
Patrick D. McCafferty
Controller
Chief Accounting Officer
and Duly Authorized Officer
Date: May 15, 1996
- -17-
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 11
CROWN CENTRAL PETROLEUM CORPORATION AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(thousands of dollars except per share amounts)
Three Months Ended
March 31
1996 1995
---------- ---------
<S> <C> <C>
Primary and Fully Diluted Earnings Per Share
Net (loss) $ (13,010) $ (10,175)
========= =========
Shares outstanding as reported at
January 1, 1996 and 1995, respectively 9,952,950 9,803,098
Restricted shares held by the Company at
January 1 (255,300) (105,500)
Weighted average effect of 7,300 shares
of common stock issued in March 1996 2,433
--------- ---------
Weighted average number of common shares
outstanding, as adjusted at March 31 9,700,083 9,697,598
<PAGE>
========= =========
Net (loss) per common share $ (1.34) $ (1.04)
========= =========
</TABLE>
-18-
<PAGE>
CROWN
(registered trademark)
Crown Central Petroleum Corporation
Refiners / marketers of petroleum products & petrochemicals
One North Charles Street, P.O. Box 1168, Baltimore,
Maryland 21203, (410) 539-7400
April 25, 1996
__________________________
RESULTS FIRST QUARTER 1996
Dear Shareholders:
Crown Central Petroleum announced today a net loss of
$13.0 million ( $1.34 per share) for the first quarter of
1996 on revenues of $371.1 million. This compares to a net
loss of $10.2 million ($1.04 per share) in the first
quarter of 1995 on revenues of $344.8 million. The 1995 net
loss includes an extraordinary charge of $3.3 million ($.33
per share) due to the early extinguishment of debt.
Crown's first quarter 1996 earnings before taxes,
interest, non-cash charges and LIFO accounting provisions
(collectively referred to as EBITDAAL) amounted to $.7
million compared to $4.6 million in the first quarter,
1995.
Operating costs were up at both Crown refineries largely
due to increases in the cost of fuel gas attributed to the
severe winter. While the Gulf Coast 3-2-1 crackspread, a
standard industry benchmark for refining margins, improved
significantly in 1996 over 1995, Crown was adversely
impacted by the high cost of foreign crudes and vacuum gas
oil which are important feedstocks predominantly used at
the Pasadena refinery. Costs associated with the
previously announced management restructuring also impacted
the first quarter 1996 results.
<PAGE>
In retail marketing, Crown was put into a classic price
squeeze being unable to pass along crude cost increases as
rapidly as they were occurring. Thus, retail margins were
compressed as higher wholesale costs were not reflected in
consumer prices at the pumps. Gasoline margins were down
39% for the first quarter, while total fuel gallons were up
an impressive 4.3%. On a comparable store basis, volumes
increased 1.8% over the corresponding quarter. While
merchandise margins were up slightly, totals were flat as
inclement weather conditions impacted our marketing areas.
Even though results for the first quarter were
disappointing, it is encouraging that refining industry
fundamentals and pricing are strengthening. Thank you for
your continuing support.
Sincerely,
HENRY a. ROSENBERG, JR.
HENRY A. ROSENBERG, JR.
Chairman of the Board, Chief Executive Officer, President
and Chief Operating Officer
- -19-
<PAGE>
<TABLE>
<CAPTION>
Crown Central Petroleum Corporation and Subsidiaries
Dollars in thousands, except per share data
Three Months Ended
March 31
1996 1995
------------ ------------
<S> <C> <C>
Sales and operating revenues $ 371,091 $ 344,833
(Loss) before income taxes (18,010) (9,207)
(Loss) before extraordinary item (13,010) (6,918)
Loss) from extraordinary item _
1/ ---- (3,257)
Net (loss) (13,010) (10,175)
(Loss) per share before
extraordinary item (1.34) (.71)
(Loss) per share from
extraordinary item ---- (.33)
Net (loss) per share (1.34) (1.04)
<PAGE>
Weighted average shares used
in the computation of
(loss) per share _
2/ 9,700,083 9,697,598
--------------------------------------------------------------------
<FN>
_
1/ During the first quarter of 1995, the Company incurred an
extraordinary loss as a result of the early retirement of its
outstanding 10.42% Senior Notes (Notes). The outstanding
Notes were retired on January 24, 1995 from the proceeds
received from the sale of $125 million of unsecured 10 7/8%
Senior Notes due February 1, 2005.
_
2/ The weighted average number of common shares used in the
computation of (loss) per share for the three months ended
March 31, 1995 set forth above exclude 105,500 shares of
Performance Vested Restricted Stock registered to participants
in the 1994 Long-Term Incentive Plan. These revisions had
no effect on the income (loss) per share as originally
reported in the shareholders' letter.
Headquartered in Baltimore, Maryland since 1930, Crown operates
two Texas refineries with a total capacity of 152,000 barrels
per day, 347 Crown gasoline and convenience stores in the
Mid-Atlantic and Southeastern U.S., and 17 product terminals
along the Colonial and Texas Eastern Products pipelines.
</TABLE>
<TABLE>
<CAPTION>
Crown Central Petroleum Corporation and Subsidiaries
Operating Statistics
Three Months Ended
March 31
1996 1995
---------- ----------
<S> <C> <C>
________
REFINING
Production (BPD - M) 149 154
Production (Mmbbl) 13.6 13.9
Gross Margin ($/bbl) 1.83 1.79
Gross Profit ($MM) 24.9 24.8
Operating Cost ($/bbl) 2.39 2.30
Operating Cost ($MM) 32.4 31.9
Net Refining Profit (Loss) ($MM) (7.5) (7.1)
______
RETAIL
<PAGE>
Number Stores 347 345
Volume (pmps - Mgal) 122 117
Volume (Mmgal) 127 121
Gasoline Gross Margin ($/gal) 0.08 0.13
Gasoline Gross Profit ($MM) 10.4 15.8
Merchandise Sales (pmps - $M) 20.7 20.7
Merchandise Sales ($MM) 21.5 21.4
Merchandise Gross Margin (%) 27.1 25.2
Merchandise Gross Margin ($MM) 5.3 4.8
Retail Gross Profit ($MM) 15.7 20.6
Retail Operating Costs (pmps - $M) 17.1 17.2
Retail Net Profit ($MM) (2.1) 3.9
Wholesale / Other ($MM) (3.5) (2.0)
Corporate Overhead ($MM) (4.9) (4.0)
Income Tax (Expense) Benefit ($MM) 5.0 2.3
(Loss) from Extraordinary Item ($MM) (3.3)
Total Net (Loss) ($MM) (13.0) (10.2)
Depreciation and Amortization ($MM) 8.0 9.5
Net Interest Expense ($MM) 2.9 2.8
Other Income 0.0 0.7
LIFO Provision ($MM) 7.8 1.3
Loss (Gain) on Sales and
Abandonments of P,P & E ($MM) 0.0 0.2
EBITDAAL ($MM) 0.7 3.8
Capital Expenditures ($MM) 7.4 6.6
---------------------------------------------------------------
<FN>
BPD = Barrels per day
bbl = barrel or barrels as applicable
gal = gallon or gallons as applicable
pmps = per month per store
M = in thousands
MM = in millions
</TABLE>
-20-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<PAGE>
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<PERIOD-TYPE> 3-MOS
<CASH> 311
<SECURITIES> 17,947
<RECEIVABLES> 125,233
<ALLOWANCES> 1,531
<INVENTORY> 113,193
<CURRENT-ASSETS> 265,837
<PP&E> 630,011
<DEPRECIATION> 327,718
<TOTAL-ASSETS> 602,687
<CURRENT-LIABILITIES> 239,384
<BONDS> 128,185
0
0
<COMMON> 49,621
<OTHER-SE> 126,659
<TOTAL-LIABILITY-AND-EQUITY> 602,867
<SALES> 371,091
<TOTAL-REVENUES> 371,091
<CGS> 355,138
<TOTAL-COSTS> 355,138
<OTHER-EXPENSES> 31,192
<LOSS-PROVISION> 75
<INTEREST-EXPENSE> 3,562
<INCOME-PRETAX> (18,010)
<INCOME-TAX> (5,000)
<INCOME-CONTINUING> (13,010)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (13,010)
<EPS-PRIMARY> (1.34)
<EPS-DILUTED> (1.34)
</TABLE>
