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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
For quarter ended April 30, 1995 Commission file number 1-8059
GETTY PETROLEUM CORP.
(Exact name of registrant as specified in its charter)
DELAWARE 11-2232705
- - --------------------------------- ------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
125 Jericho Turnpike, Jericho, New York 11753
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(Address of principal executive offices) (Zip Code)
(516) 338 - 6000
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(Registrant's telephone number, including area code)
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 (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [ X ] No [ ]
Registrant has 12,644,754 shares of Common Stock, par value $.10 per share,
outstanding as of April 30, 1995.
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<PAGE>
GETTY PETROLEUM CORP.
INDEX
Part I. FINANCIAL INFORMATION Page Number
Item 1. Financial Statements
Consolidated Balance Sheets as of April 30, 1995 and
January 31, 1995 1
Consolidated Statements of Operations for the three months ended
April 30, 1995 and 1994 2
Consolidated Statements of Cash Flows for the three months ended
April 30, 1995 and 1994 3
Notes to Consolidated Financial Statements 4
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 5 - 6
Part II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 7
Signatures 7
<PAGE>
GETTY PETROLEUM CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
- - ------------------------------------------------------------------------------
April 30, January 31,
Assets: 1995 1995
- - ------------------------------------------------------------------------------
(unaudited)
Current assets:
Cash and cash equivalents $49,856 $41,576
Short-term investments 466 415
Accounts receivable, net 18,460 18,338
Inventories 10,014 11,117
Deferred income taxes 6,224 6,004
Prepaid expenses and other current assets 2,431 3,536
-------- --------
Total current assets 87,451 80,986
Property, plant and equipment, at cost, less
accumulated depreciation and amortization 187,344 188,527
Other assets 9,822 9,444
-------- --------
Total assets $284,617 $278,957
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Liabilities and Stockholders' Equity:
- - ------------------------------------------------------------------------------
Current liabilities:
Current portion of long-term debt
and capital lease obligations $10,959 $11,118
Accounts payable 47,095 39,326
Accrued expenses 30,487 32,570
Gasoline taxes payable 9,732 8,318
Income taxes payable 220 377
-------- --------
Total current liabilities 98,493 91,709
Long-term debt 29,447 30,849
Obligations under capital leases 27,918 29,349
Deferred income taxes 13,991 14,120
Other, principally deposits 14,593 14,450
Stockholders' equity:
Preferred stock -- --
Common stock, par value $.10 per share 1,354 1,354
Other stockholders' equity 98,821 97,126
-------- --------
100,175 98,480
-------- --------
Total liabilities and stockholders' equity $284,617 $278,957
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See accompanying notes.
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GETTY PETROLEUM CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share amounts)
(unaudited)
- - ------------------------------------------------------------------------------
Three months ended April 30,
1995 1994
- - ------------------------------------------------------------------------------
Net sales $195,007 $170,701
Rental income 8,531 7,870
Other income, net 1,534 889
-------- --------
205,072 179,460
-------- --------
Cost of sales 188,228 162,648
Selling, general and administrative expenses 6,100 6,548
-------- --------
194,328 169,196
-------- --------
Earnings before interest, taxes
and depreciation 10,744 10,264
Interest expense 2,513 3,273
Depreciation and amortization 5,491 5,298
-------- --------
Earnings before provision for
income taxes and cumulative effect
of accounting change 2,740 1,693
Provision for income taxes 1,084 705
-------- --------
Earnings before cumulative
effect of accounting change 1,656 988
Cumulative effect of accounting change -- 183
-------- --------
Net earnings $ 1,656 $ 1,171
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Per Share Data:
Earnings before cumulative
effect of accounting change $ .13 $ .08
Cumulative effect of accounting change -- .01
-------- --------
Net earnings per share $ .13 $ .09
======== ========
Weighted average shares outstanding 12,645 12,638
======== ========
See accompanying notes.
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GETTY PETROLEUM CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
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Three months ended
April 30,
1995 1994
- - ------------------------------------------------------------------------------
Cash flows from operating activities:
Net income $1,656 $1,171
Adjustments to reconcile net income
to net cash provided by operating
activities:
Cumulative effect of accounting change -- (183)
Depreciation and amortization 5,491 5,298
Deferred income taxes (371) 462
(Gain) loss on dispositions of property, plant
and equipment (602) 98
Sale of trading securities -- 7,860
Changes in assets and liabilities:
Accounts receivable (122) 545
Inventories 1,103 (584)
Prepaid expenses and other current assets 1,102 1,082
Other assets (457) 291
Accounts payable, accrued expenses and
gasoline taxes payable 7,100 3,529
Income taxes payable (157) (2,371)
Other, principally deposits 143 121
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Net cash provided by operating activities 14,886 17,319
------- -------
Cash flows from investing activities:
Capital expenditures (4,329) (3,735)
Property acquisitions -- (113)
Proceeds from dispositions of property,
plant and equipment 705 172
------- -------
Net cash used in investing activities (3,624) (3,676)
------- -------
Cash flows from financing activities:
Repayment of long-term debt (1,748) (1,783)
Payments under capital lease obligations (1,244) (929)
Treasury stock and stock options, net 10 101
------- -------
Net cash used in financing activites (2,982) (2,611)
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Net increase in cash and cash equivalents 8,280 11,032
Cash and cash equivalents at beginning of period 41,576 42,334
------- -------
Cash and cash equivalents at end of period $49,856 $53,366
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Supplemental disclosures of cash flow information
Cash paid during the period for:
Interest $2,547 $3,847
Income taxes, net 1,686 2,933
See accompanying notes.
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GETTY PETROLEUM CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. General:
The accompanying consolidated financial statements include the accounts
of Getty Petroleum Corp. and its wholly-owned subsidiaries (the "Company").
The consolidated financial statements are unaudited but, in the opinion of
management, reflect all adjustments (consisting of normal recurring accruals)
necessary for a fair presentation.
2. Earnings per share:
Earnings per share is computed by dividing net earnings by the weighted
average number of shares of common stock outstanding during the period.
Common stock equivalents are not included in earnings per share computations
since their effect is immaterial.
3. Inventories:
Inventories, primarily finished petroleum products, are principally
accounted for under the lower of last-in, first-out ("LIFO") cost or market.
As of April 30, 1995 and January 31, 1995, the carrying value of the Company's
LIFO inventories approximated the first-in, first-out ("FIFO") method or
replacement cost.
4. Stockholders' equity:
A summary of the changes in stockholders' equity for the three months
ended April 30, 1995 is as follows (in thousands):
<TABLE>
<CAPTION>
Retained Treasury Net Unrealized
Common Paid-in Earnings Stock, Gain (Loss) on
Stock Capital (Deficit) at cost Equity Securities Total
- - --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance, January 31,
1995 $1,354 $119,890 $(8,393) $14,203 $(168) $ 98,480
Net earnings 1,656 1,656
Net unrealized gain
on equity securities 29 29
Purchase of
treasury stock 2 (2)
Issuance of
treasury stock (4) (16) 12
------ -------- ------- ------- ----- --------
Balance, April 30, 1995 $1,354 $119,886 $(6,737) $14,189 $(139) $100,175
====== ======== ======= ======= ===== ========
</TABLE>
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Net sales for the first fiscal quarter ended April 30, 1995 were $195
million as compared with $170.7 million for the same quarter last year. The
increase in net sales was principally due to an increase in average selling
prices attributable to the introduction of reformulated gasolines, and an
increase in retail gallonage sold, partially offset by a decrease in
wholesale gallonage sold. Gross profit (excluding rental and other income)
was $6.8 million for the quarter ended April 30, 1995 compared to $8.1
million in the comparable period last year. The decrease in gross profit was
principally due to higher environmental maintenance expenditures.
Rental income for the three months ended April 30, 1995 amounted to $8.5
million as compared with $7.9 million for the quarter ended April 30, 1994.
The increase was due to increased lease rental rates in Company owned and
leased locations and lease renewals.
Other income, net was $1.5 million for the three months ended April 30,
1995 as compared with $.9 million for the quarter ended April 30, 1994. The
improvement was primarily due to an increase in gains from dispositions of
assets.
Selling, general and administrative expenses for the quarter ended April
30, 1995 amounted to $6.1 million as compared with $6.5 million for the
quarter ended April 30, 1994. The decrease was principally due to lower
payroll costs as a result of a restructuring of the Company's organization
and its operations in October 1994.
Interest expense for the three months ended April 30, 1995 amounted to
$2.5 million as compared with $3.3 million for the quarter ended April 30,
1994. The decrease was principally due to reduced debt outstanding during
the current fiscal quarter, principally related to the redemption in May 1994
of the Company's subordinated debentures.
Depreciation and amortization was comparable in the quarters ended April
30, 1995 and 1994.
The Company adopted Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity Securities", as of the
beginning of the prior fiscal year and has reported the cumulative effect of
the change in accounting principle as a credit to earnings of $.2 million in
the consolidated statement of operations for the quarter ended April 30,
1994.
Liquidity and Capital Resources
As of April 30, 1995, working capital amounted to a deficit of $11
million as compared to a deficit of $10.7 million as of January 31, 1995.
The decrease in working capital was primarily due to $4.3 million of capital
expenditures and the reduction of $2.8 million in long- term indebtedness,
partially offset by funds generated during the quarter from operations.
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<PAGE>
The Company's principal sources of liquidity are cash flows from
operations, which amounted to $14.9 million during the three months ended
April 30, 1995, and its short-term unsecured lines of credit. As of April
30, 1995, lines of credit amounted to $60 million, of which $34 million was
utilized in connection with outstanding letters of credit. Management
believes that cash requirements for operations and debt service can be met by
its available cash balances and short-term investments which amounted to
$50.3 million at April 30, 1995, cash flows from operations and its credit
lines.
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PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Designation of Exhibit
in this Quarterly Report
on Form 10-Q Description of Exhibit
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27 Financial Data Schedule
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the quarter for which
this report is filed.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GETTY PETROLEUM CORP.
(Registrant)
Dated: June 12, 1995 BY: ______________________________________
(Signature)
MICHAEL K. HANTMAN
Vice President and
Corporate Controller
(Chief Accounting Officer)
Dated: June 12, 1995 BY: ______________________________________
(Signature)
JOHN J. FITTERON
Senior Vice President, Treasurer and
Chief Financial Officer
(Principal Financial Officer)
Dated: June 12, 1995 BY: ______________________________________
(Signature)
LEO LIEBOWITZ
President (Chief Executive Officer)
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF GETTY PETROLEUM CORP. AND SUBSIDIARIES
AS OF APRIL 30, 1995 AND FOR THE THREE MONTHS THEN ENDED AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH CONSOLIDATED FINANCIAL STATEMENTS.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1996
<PERIOD-END> APR-30-1995
<CASH> 49,856
<SECURITIES> 466
<RECEIVABLES> 20,093
<ALLOWANCES> 1,633
<INVENTORY> 10,014
<CURRENT-ASSETS> 87,451
<PP&E> 339,488
<DEPRECIATION> 152,144
<TOTAL-ASSETS> 284,617
<CURRENT-LIABILITIES> 98,493
<BONDS> 57,365
<COMMON> 1,354
0
0
<OTHER-SE> 98,821
<TOTAL-LIABILITY-AND-EQUITY> 284,617
<SALES> 195,007
<TOTAL-REVENUES> 205,072
<CGS> 188,228
<TOTAL-COSTS> 193,719
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 117
<INTEREST-EXPENSE> 2,513
<INCOME-PRETAX> 2,740
<INCOME-TAX> 1,084
<INCOME-CONTINUING> 1,656
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,656
<EPS-PRIMARY> .13
<EPS-DILUTED> .13
</TABLE>
