HOUSTON, May 5 /PRNewswire-FirstCall/ -- Frontier Oil Corporation
(NYSE: FTO) today announced record first quarter net income of $34.4 million,
or $1.23 per diluted share for the quarter ended March 31, 2005, compared to a
net loss of $3.7 million, or $0.14 per share, for the same period of 2004.
The record $34.4 million earned in the first quarter of 2005 represents a
dramatic increase over the prior first quarter record of $4.5 million earned
in 2001.
The record quarter resulted from the continued strength of crude oil
differentials, a significant improvement in the diesel crack spread and a
decrease in interest expense. The light/heavy crude oil differential
increased to $14.10 per barrel for the quarter compared to $8.17 for same
period in 2004. Similarly, the WTI/WTS crude oil differential increased to
$4.68 per barrel for the quarter compared to $2.88 per barrel for the first
quarter of 2004. The diesel crack spread increased to an average of $9.92 per
barrel for the recent quarter compared to $4.07 per barrel in the first
quarter of 2004 while the gasoline crack spread declined slightly to an
average of $7.28 per barrel in the quarter compared to an average $7.49 per
barrel in 2004. Frontier's interest expense and other financing costs
decreased from $5.9 million in the first quarter of 2004 to $3.0 million for
the first quarter of 2005 due to the refinancing and reduction of long-term
debt completed in the fourth quarter of 2004.
The Company's record first quarter results were attained despite the
impact of major turnaround activity at the Company's El Dorado Refinery, which
affected the fluid catalytic cracking unit and other units. As a result of
the turnaround, total charges decreased to 150,580 barrels per day for the
quarter ended March 31, 2005 compared to 152,015 barrels per day for the
quarter ended March 31, 2004. The El Dorado turnaround also led to a planned
build of intermediate inventories at quarter end. We expect to process the
intermediates into finished products and sell them prior to the end of
July 2005.
Crack spreads and crude oil differentials for the month of April 2005
trended upward from the first quarter 2005 and are significantly above 2004
levels. Diesel crack spreads, gasoline crack spreads and the crude oil
differentials in April 2005 were all above historical averages for the period.
Frontier's Chairman, President and CEO, James Gibbs, commented, "We are
delighted by the first quarter results and are ecstatic about the outlook for
the remainder of the year. When you consider that the first quarter is
usually our weakest, our recent results coupled with our outlook for the near
term has us more optimistic about our industry than ever. Our board recently
authorized a 2-for-1 stock split effective May 23, 2005 and a 33% increase to
our dividend, subject to shareholder approval. We will continue to review
opportunities to return value to our shareholders."
Frontier's balance sheet remains in excellent shape. The quarter end cash
balance was $104.7 million and the Company had $32.0 million borrowed under
its revolving credit facility, due principally to investment in working
capital associated with the turnaround.
The first quarter 2005 results include an after-tax inventory gain of
approximately $19.4 million, or $0.69 per diluted share, compared to a gain of
$9.0 million, or $0.34 per diluted share, for the same period of 2004.
Conference Call
A conference call is scheduled for today, May 5, 2005, at 11:30 a.m.
eastern time, to discuss the financial results. To access the call, please
dial (800) 406-5356. For those individuals outside the United States, please
call (913) 981-5572. A recorded replay of the call may be heard through
May 19, 2005 by dialing (888) 203-1112 (international callers (719) 457-0820)
and entering the code 1714606. In addition, the real-time conference call and
a recorded replay will be webcast by PR Newswire. To access the call or the
replay via the Internet, go to http://www.frontieroil.com and register from
the Investor Relations page of the site.
Frontier operates a 110,000 barrel-per-day refinery located in El Dorado,
Kansas, and a 46,000 barrel-per-day refinery located in Cheyenne, Wyoming, and
markets its refined products principally along the eastern slope of the Rocky
Mountains and in other neighboring plains states. Information about the
Company may be found on its web site http://www.frontieroil.com .
This press release includes "forward-looking statements" as defined by the
Securities and Exchange Commission. Such statements are those concerning
strategic plans, expectations and objectives for future operations. All
statements, other than statements of historical facts, included in this press
release that address activities, events or developments that the Company
expects, believes or anticipates will or may occur in the future are forward-
looking statements. These statements are based on certain assumptions made by
the Company based on its experience and perception of historical trends,
current conditions, expected future developments and other factors it believes
are appropriate in the circumstances. Such statements are subject to a number
of assumptions, risks and uncertainties, many of which are beyond the control
of the Company. Investors are cautioned that any such statements are not
guarantees of future performance and that actual results or developments may
differ materially from those projected in the forward-looking statements.
FRONTIER OIL CORPORATION
Three Months Ended
March 31
2005 2004
INCOME STATEMENT DATA ($000's except per share)
Revenues $692,640 $537,332
Raw material, freight and other costs 558,323 464,583
Refinery operating expenses,
excluding depreciation 61,351 55,290
Selling and general expenses,
excluding depreciation 7,039 6,675
Merger termination and legal costs 4 3,287
Operating income before depreciation 65,923 7,497
Depreciation and amortization 8,260 7,819
Operating income (loss) 57,663 (322)
Interest expense and other financing costs 3,037 5,856
Interest income (737) (201)
Provision (benefit) for income taxes 20,927 (2,241)
Net income (loss) $ 34,436 $ (3,736)
Net income (loss) per diluted (basic) share $ 1.23 $ (0.14)
Average shares outstanding (000's) 27,978 26,300
OTHER FINANCIAL DATA ($000's)
EBITDA (1) $ 65,923 $ 7,497
Cash flow before changes in working capital 57,968 3,727
Working capital changes (79,715) (19,577)
Net cash provided (used) by operating
activities (21,747) (15,850)
Net cash provided (used) by investing
activities (28,471) (17,989)
OPERATING DATA
Operations (bpd)
Total charges 150,580 152,015
Gasoline yields 67,006 74,468
Diesel yields 49,111 47,459
Total sales 145,911 148,642
Refinery operating margin information
($ per bbl)
Refined products revenue $ 52.79 $ 39.97
Raw material, freight and other costs 42.52 34.35
Refinery operating expenses, excluding
depreciation 4.67 4.09
Depreciation and amortization 0.65 0.56
Light/Heavy crude oil differential
($ per bbl) $ 14.10 $ 8.17
WTI/WTS crude oil differential ($ per bbl) 4.68 2.88
BALANCE SHEET DATA ($000's) 3/31/05 12/31/04
Cash, including cash equivalents (a) $104,736 $124,389
Working capital 119,463 97,261
Current debt (b) 32,000 ---
Long-term debt (c) 150,000 150,000
Shareholders' equity (d) 275,794 240,113
Net debt to book capitalization
(b+c-a)/(b+c-a+d) 21.9% 9.6%
(1) EBITDA represents income before interest expense, interest income,
income tax, and depreciation and amortization. EBITDA is not a
calculation based upon generally accepted accounting principles;
however, the amounts included in the EBITDA calculation are derived
from amounts included in the consolidated financial statements of the
Company. EBITDA should not be considered as an alternative to net
income or operating income, as an indication of operating performance
of the Company or as an alternative to operating cash flow as a
measure of liquidity. EBITDA is not necessarily comparable to
similarly titled measures of other companies. EBITDA is presented
here because it enhances an investor's understanding of Frontier's
ability to satisfy principal and interest obligations with respect to
Frontier's indebtedness and to use cash for other purposes, including
capital expenditures. EBITDA is also used for internal analysis and
as a basis for financial covenants. Frontier's EBITDA for the three
months ended March 31, 2005 and 2004 is reconciled to net income as
follows:
Three Months Ended
March 31
2005 2004
Net income (loss) $ 34,436 $ (3,736)
Add provision (benefit) for income taxes 20,927 (2,241)
Add interest expense and other financing costs 3,037 5,856
Subtract interest income (737) (201)
Add depreciation and amortization 8,260 7,819
EBITDA $ 65,923 $ 7,497
SOURCE Frontier Oil Corporation
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Related links:
http://www.frontieroil.com
CONTACT:
Doug Aron of Frontier Oil Corporation,
+1-713-688-9600, ext. 145
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