(CROWN NEWS RELEASE LETTERHEAD)
Institutional Inquiries:
JOHN E. WHEELER, JR.
Executive Vice President and
Chief Financial Officer
(410) 659-4803
Shareholder Inquiries:
FOR IMMEDIATE RELEASE J. STEVEN WISE, Manager
Baltimore, Maryland -- JULY 27, 2000 Corporate & Government Affairs
(410) 659-4859
CROWN CENTRAL REPORTS SECOND QUARTER RESULTS
Crown Central Petroleum Corporation (CNP.A and CNP.B on the American Stock
Exchange) announced today a net profit of $9.2 million ($.93 per share) in the
second quarter of 2000, compared to a net loss of $11.0 million ($1.12 per
share) in the second quarter of 1999. Sales and operating revenues for the
second quarter were $481.0 million compared to $281.4 million in the second
quarter of 1999.
For the first six months of 2000, the Company had a net profit of $5.6
million ($.57 per share) on revenues of $902.5 million, compared to a net loss
of $22.9 million ($2.32 per share) on revenues of $506.6 million during the
same period in 1999.
After adjusting the net profit for interest, taxes, depreciation,
amortization, abandonments and the LIFO inventory provision, the Company's cash
flow from operating activities for the second quarter 2000 was $29.4 million,
up from $6.9 million during the same period in 1999. With the Company's 35,000
barrel per day processing agreement with Statoil set to expire in October 2000,
the additional cash flow generated from operations will be needed to fund
estimated working capital requirements of approximately $27 million to enable
the Company to continue to operate its refineries at optimum capacity.
Refining margins contributed significantly to the improved results for the
period. The 20-day delayed Gulf Coast 3-2-1 benchmark increased from $2.32 per
barrel in the second quarter of 1999 to $6.23 per barrel in the second quarter
of 2000. Stocks of gasoline throughout the country were well below 1999 levels
during the period while demand remained strong, resulting in higher margins.
West Texas Intermediate crude oil averaged $28.93 per barrel for the second
quarter 2000, a 64% increase over the same period in 1999, when the average was
$17.64 per barrel.
The retail segment of the Company experienced a slight increase in gasoline
gross margins in the second quarter versus the same period last year, though
margins dropped substantially during the second half of the quarter.
(more)
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Gasoline volumes remained steady on a per month per store basis when compared
with the second quarter of 1999. Merchandise sales continued to increase on a
per month per store basis, improving from $37.8 thousand during the second
quarter of 1999 to $39.9 thousand for the same period in 2000.
Despite the significant improvement in refining margins during the second
quarter, in July gasoline inventories have returned to more historic average
levels. As a result, the 20-day delayed 3-2-1 crack spread has averaged $2.33
per barrel for the first 25 days of July. In addition, the currently
forecasted 20-day delayed 3-2-1 margin for the remainder of 2000 is
approximately $2.49 per barrel.
Additionally, the Environmental Protection Agency (EPA) proposed a rule in
May requiring radical sulfur reductions in diesel fuel. This follows the EPA's
December 1999 adoption of a rule requiring drastic reductions in gasoline
sulfur levels and the implementation on June 1, 2000 of tighter specifications
for reformulated gasoline. These requirements, and the question of whether the
industry will be able to implement them in a relatively short period of time,
only add to the many challenges facing an already uncertain and volatile
industry. The Company is considering the impact of these rules on its
operations.
The Company announced on April 10, 2000 that it had entered into a
definitive merger agreement that would result in Crown becoming an indirect
wholly-owned subsidiary of Rosemore, Inc., a Maryland corporation that owns 49%
of Crown's Class A common stock and 11% of Crown's Class B common stock. A
Special Meeting has been scheduled for August 24, 2000 at 10:00 a.m. at the
Turf Valley Conference Center in Ellicott City, Maryland for stockholders to
consider and vote upon the merger and related Agreement and Plan of Merger.
Headquartered in Baltimore, Maryland since 1930, Crown operates two Texas
refineries with a total capacity of 152,000 barrels per day, 327 Crown gasoline
stations and convenience stores in the Mid-Atlantic and Southeastern U.S., and
13 product terminals along the Colonial, Plantation and Texas Eastern Product
pipelines.
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CROWN CENTRAL PETROLEUM CORPORATION
OPERATING STATISTICS
Six Months Ended Three Months Ended
June 30 June 30
2000 1999 2000 1999
-------- -------- ------- --------
COMBINED REFINERY OPERATIONS
Production (BPD - M) 147 136 155 138
Production (MMbbl) 26.7 24.6 14.1 12.5
Sales (MMbbl) 26.1 21.4 13.6 13.0
Gross Margin ($/bbl) 4.36 2.76 4.33 2.55
Gross Profit ($MM) 113.8 58.9 58.9 33.2
Operating Cost ($/bbl) (2.59) (3.01) (2.68) (2.61)
Operating Cost ($MM) (67.6) (64.4) (36.4) (34.0)
Refining Operating Profit
(Loss) ($MM) 46.2 (5.5) 22.5 (0.8)
RETAIL
Total Stores 327 348 327 348
Volume (pmps - Mgal) 119 118 120 120
Volume (MMgal) 233 247 118 125
Gasoline Gross Margin ($/gal) 0.093 0.092 0.103 0.098
Gasoline Gross Profit ($MM) 21.6 22.8 12.2 12.3
Company-Operated Stores 225 244 225 244
Merchandise Sales (pmps - $M) 37.6 35.6 39.9 37.8
Merchandise Sales ($MM) 50.8 52.1 26.9 27.7
Merchandise Gross Margin (%) 31.7 30.7 32.0 30.7
Merchandise Gross Profit ($MM) 16.1 16.0 8.6 8.5
Ancillary Income, Net ($MM) 6.2 7.1 3.0 3.7
Retail Gross Profit ($MM) 43.9 45.9 23.8 24.5
Retail Operating Costs
(pmps - $M) (20.3) (21.0) (20.1) (20.6)
Retail Operating Costs ($MM) (39.9) (43.9) (19.7) (21.5)
Retail Non-Operating (Expense)
Income ($MM) (0.1) 0.4 (0.4) 0.7
Retail Operating Profit
(Loss) ($MM) 3.9 2.4 3.7 3.7
WHOLESALE / TERMINAL
OPERATING PROFIT (LOSS) ($MM) 14.0 6.9 3.2 2.1
OTHER
LIFO (Provision) Recovery ($MM) (30.3) (21.5) (2.9) (12.3)
Corporate Overhead ($MM) (12.6) (12.3) (6.0) (5.9)
Net Interest (Expense) ($MM) (8.2) (6.9) (4.1) (3.5)
Other (Expense) Income ($MM) (3.8) 1.2 (3.9) (0.5)
Income Tax (Expense) Benefit
($MM) (3.6) 12.8 (3.3) 6.2
Total Net Income (Loss) ($MM) 5.6 (22.9) 9.2 (11.0)
Depreciation & Amortization
($MM) 19.3 17.9 9.7 9.1
Net Interest Expense ($MM) 8.2 6.9 4.1 3.5
LIFO Provision (Recovery) ($MM) 30.3 21.5 2.9 12.3
(Gain) Loss from Asset
Disposals ($MM) (0.4) (0.4) 0.2 (0.8)
Income Tax Expense (Benefit)
($MM) 3.6 (12.8) 3.3 (6.2)
EBITDAAL ($MM) 66.6 10.2 29.4 6.9
Capital Expenditures ($MM) 8.1 12.9 3.3 4.3
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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
Note: Merchandise sales consist of sales generated by
Company-operated stores, therefore, the per month per
store (pmps) amounts are calculated using Company-operated
stores only.
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CROWN CENTRAL PETROLEUM CORPORATION AND SUBSIDIARIES
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
Six Months Ended Three Months Ended
June 30 June 30
2000 1999 2000 1999
-------- -------- -------- --------
Sales and operating revenues $ 902,533 $ 506,578 $ 481,049 $ 281,413
Income (loss) before income
taxes 9,210 (35,621) 12,486 (17,271)
Net income (loss) 5,650 (22,859) 9,213 (11,029)
Net income (loss) per share:
Basic $ 0.57 $ (2.32) $ 0.93 $ (1.12)
Diluted 0.56 (2.32) 0.92 (1.12)
Weighted average shares used in
the computation of net income
(loss) per share:
Basic 9,871,431 9,871,431 9,871,431 9,871,431
Diluted 10,000,859 9,871,431 9,993,647 9,871,431
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