Giant Industries, Inc. Announces Third Quarter 2006 Results.SCOTTSDALE, Ariz. -- Giant Industries, Inc. [NYSE NYSE See: New York Stock Exchange : GI] today reported net earnings of $44.0 million, or $3.00 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share for the third quarter ended September 30, 2006. Net earnings were $46.6 million, or $3.38 per diluted share in the third quarter of 2005. The Company reported net earnings of $80.9 million, or $5.51 per diluted share, for the first nine months of 2006 compared to net earnings of $77.3 million, or $5.80 per diluted share in 2005. Giant's Chairman and Chief Executive Officer, Fred Holliger commented, "Strong financial performance from our Four Corners refineries and our Retail and Wholesale strategic business units contributed to the overall results in the third quarter. Our Four Corners refineries performed well throughout the quarter as refining refining, any of various processes for separating impurities from crude or semifinished materials. It includes the finer processes of metallurgy, the fractional distillation of petroleum into its commercial products, and the purifying of cane, beet, and maple sugar margins and the demand for refined products remained strong throughout most of the quarter. At our Yorktown refinery, operating results were negatively impacted by weaker refining margins which resulted primarily from the processing of relatively high cost feedstocks in a declining crude oil and finished products market particularly late in the quarter, coupled with the delay in the start-up of the Ultra Low Sulfur Diesel unit. The operating results were positively impacted by a $28.8 million after-tax gain from a final settlement with our insurers, relative to the November 2005 fire at the Yorktown refinery." "In the third quarter, our Retail operations continued to see growth in fuel volumes and merchandise sales. Same store fuel volumes increased approximately 4% and same store merchandise sales increased approximately 5% over the prior year third quarter level. Throughout the quarter, we also experienced improvement in fuel margins. Also in the quarter, the number of retail locations that we operate increased from 134 to 153 as a result of an acquisition that we closed in mid-August. All of these factors contributed to an 88% improvement in third quarter profitability from our Retail operations." "Our Wholesale operations continued to experience strong demand for gasoline gasoline or petrol, light, volatile mixture of hydrocarbons for use in the internal-combustion engine and as an organic solvent, obtained primarily by fractional distillation and "cracking" of petroleum, but also obtained from natural gas, by and diesel in both wholesale and cardlock operations. However, profitability was lower than the same quarter last year as fuel margins declined slightly from the prior year level." Commenting on the recent Yorktown refinery and Ciniza refinery fires, Holliger stated, "The Yorktown refinery is currently operating at full crude oil capacity of approximately 62,000 barrels per day Barrels per day (abbreviated BPD, bbl/d, bpd, bd or b/d) is a measurement used to describe the amount of crude oil (measured in barrels) produced or consumed by an entity in one day. . We are, however, unable to operate the Ultra Low Sulfur Diesel unit. We currently anticipate that the Ultra Low Sulfur Diesel unit will again be operational in mid-February. As to our Ciniza refinery operations, the alkylation alkylation /al·kyl·a·tion/ (al?ki-la´shun) the substitution of an alkyl group for an active hydrogen atom in an organic compound. al·kyl·a·tion n. unit is in the process of being repaired, and we currently anticipate that it should be operational in mid-December. Most of the units shutdown shut·down n. A cessation of operations or activity, as at a factory. shutdown Noun the closing of a factory, shop, or other business Verb shut down after the fire at the refinery have been brought back on-line and we anticipate returning Ciniza to normal operations Generally and collectively, the broad functions that a combatant commander undertakes when assigned responsibility for a given geographic or functional area. Except as otherwise qualified in certain unified command plan paragraphs that relate to particular commands, "normal operations" of , other than the alkylation unit, by next week." Commenting on the 16-inch pipeline that will supply crude oil to the Company's Four Corners refineries, Holliger commented, "We have successfully completed hydrotesting the pipeline, and we are in the process of making the necessary changes to reverse the flow of the pipeline. We have experienced some project delays from our original schedule; nevertheless, we currently anticipate that we should have the pipeline operational in February with new crude oil at the refineries by the end of the first quarter of 2007. As previously noted, when fully operational, the pipeline has sufficient capacity to allow us to again operate both Four Corners refineries at maximum rates." Holliger offered the following update on the proposed merger with Western Refining, "Since we signed the original merger agreement, a number of unexpected events occurred that resulted in a change in the transaction terms. Central to these events were two recent fires at Giant's Ciniza and Yorktown refineries and the resulting effects on Giant's operations, including the costs and terms of Giant's insurance coverage. After careful consideration of these events, all of which were unforeseen when we announced the original transaction in August, the Boards of Directors of both companies decided that it still makes good sense to go forward with the transaction, but at an amended purchase price. While recent events have caused us to revisit re·vis·it tr.v. re·vis·it·ed, re·vis·it·ing, re·vis·its To visit again. n. A second or repeated visit. re some of the terms of the transaction, we still firmly believe this combination is in the best interests of all of our stakeholders Stakeholders All parties that have an interest, financial or otherwise, in a firm-stockholders, creditors, bondholders, employees, customers, management, the community, and the government. ." In closing, relative to fourth quarter performance, Holliger remarked, "We currently believe that our refining fundamentals, overall, are weaker now as compared to the same time last year, due in part to the narrowing of crack spreads Crack Spread The spread created when purchasing oil futures and offsetting the position by selling gasoline and heating oil futures. Notes: As the two futures contracts within the spread are relatively similar, risk is hedged against. from the post hurricane period of a year ago. In addition, our refining operations will be negatively impacted as a result of the recent fires until our units become fully operational. Same store fuel volumes for our Retail group are above the prior year's levels, however fuel margins are lower. In addition, same store merchandise sales for our Retail group are above the prior year's level, while same store merchandise margins have remained stable. The Wholesale group currently is experiencing stable margins and volumes as compared to the same time last year." Giant's senior management will hold a conference call at 3:00 p.m. ET on November 14, 2006 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 Scottsdale (O'odham Vaṣai S-vaṣonĭ) is a city in Maricopa County, Arizona, United States, adjacent to Phoenix. Scottsdale has become internationally recognized as a premier and posh tourist destination, while maintaining its own identity and culture as " , is a refiner re·fine v. re·fined, re·fin·ing, re·fines v.tr. 1. To reduce to a pure state; purify. 2. To remove by purifying. 3. and marketer of petroleum products. Giant owns and operates one Virginia and two New Mexico New Mexico, state in the SW United States. At its northwestern corner are the so-called Four Corners, where Colorado, New Mexico, Arizona, and Utah meet at right angles; New Mexico is also bordered by Oklahoma (NE), Texas (E, S), and Mexico (S). crude oil refineries This is a list of oil refineries. The Oil and Gas Journal also publishes a worldwide list of refineries annually in a country-by-country tabulation that includes for each refinery: location, crude oil daily processing capacity, and the size of each process unit in the refinery. , a crude oil gathering pipeline system based in Farmington, New Mexico Farmington (Navajo: Tótah) is a city in San Juan County, New Mexico, United States. As of the 2000 census, the city had a total population of 37,844. The Census Bureau's 2006 population estimate for the city is 43,573. , which services the New Mexico refineries, finished products distribution terminals in Albuquerque, New Mexico “Albuquerque” redirects here. For other uses, see Albuquerque (disambiguation). Albuquerque (pronounced [ˈæl.bə.kɚ.kiː], Spanish: [al.βu. and Flagstaff, Arizona
This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 Words and Phrases® A multivolume set of law books published by West Group containing thousands of judicial definitions of words and phrases, arranged alphabetically, from 1658 to the present. , 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 risk that the pipeline acquisition will not result in additional growth or increased profitability for our Four Corners operations, the risk that it will not be possible to place the acquired pipeline system in operation and/or operate the Bloomfield and Ciniza refineries at maximum rates due to financial, operational or other constraints CONSTRAINTS - A language for solving constraints using value inference. ["CONSTRAINTS: A Language for Expressing Almost-Hierarchical Descriptions", G.J. Sussman et al, Artif Intell 14(1):1-39 (Aug 1980)]. , the risk that the timetable for placing the pipeline system into operation will be different than anticipated, the risk that it will not be possible to obtain additional crude oil for processing at the Bloomfield and Ciniza refineries at cost effective prices; the risk that it will cost more or take longer to repair the damaged units at the Ciniza and Yorktown refineries; the risk that we will not receive anticipated amounts of insurance proceeds for the damaged units at the Ciniza and Yorktown refineries; the risk that the Western transaction will not close on schedule or at all; the risk that our refining fundamentals will continue to weaken; the risk that same store fuel volumes and merchandise sales for our retail group will not remain above the prior year's level and that fuel margins will continue to be lower; the risk that margins and volumes for our wholesale group will not remain stable as compared to last year; 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.
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Share Price Data (NYSE: GI) >
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Close
2006 3rd Quarter > $ 82.30 $ 64.49
$ 81.20
2006 2nd Quarter > $ 76.97 $ 56.09
$ 66.55
2006 1st Quarter > $ 71.00 $ 52.44
$ 69.54
2005 4th Quarter > $ 60.50 $ 47.80
$ 51.96
2005 3rd Quarter > $ 59.74 $ 35.90
$ 58.54
RECONCILIATIONS TO AMOUNTS REPORTED UNDER GENERALLY ACCEPTED ACCOUNTING PRINCIPLES The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting REFINING GROUP Refining Margin Refining margin is the difference between average net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight prices and average cost of products produced per refinery sourced sales barrel of refined product. Refining margins for each of our refineries and all of our refineries on a consolidated basis are calculated as shown below. [TABLE OMITTED] [TABLE OMITTED] RETAIL GROUP((1)(2)) Fuel Margin Fuel margin is the difference between fuel sales less cost of fuel sales divided by number of gallons sold. [TABLE OMITTED] WHOLESALE GROUP((1)(2)) Fuel Margin Fuel margin is the difference between fuel sales less cost of fuel sales divided by number of gallons sold. [TABLE OMITTED] Consolidated [TABLE OMITTED] Our refining margin per barrel is calculated by subtracting cost of products from net sales and dividing the result by the number of barrels sold for the period. Our fuel margin per gallon is calculated by subtracting cost of fuel sold from fuel sales and dividing the result by the number of gallons sold for the period. We use refining margin per barrel and fuel margin per gallon to evaluate performance, and allocate resources. These measures may not be comparable to similarly titled measures used by other companies. Investors and analysts use these financial measures to help analyze and compare companies in the industry on the basis of operating performance. These financial measures should not be considered as alternatives to segment operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. , revenues, costs of sales and operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. or any other measure of financial performance presented in accordance with accounting principles generally accepted in the United States of America UNITED STATES OF AMERICA. The name of this country. The United States, now thirty-one in number, are Alabama, Arkansas, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Hampshire, . |
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